The “average return” on alternative investments depends heavily on which type of alternative asset you mean (private equity, real estate, hedge funds, commodities, etc.), what time period you’re considering, what fees and liquidity constraints there are, and your risk/volatility tolerance. I can give you some ballpark figures and ranges, plus caveats. If you tell me which geography or kind of alternative you meant (India / US / hedge funds / art / etc.), I can narrow down.
What counts as “alternative investments”
Typically this includes:
- Private equity / buyouts
- Venture capital
- Private credit / debt
- Real estate (non-public; not just REITs)
- Infrastructure
- Hedge funds
- Commodities
- Collectibles, art, etc.
These tend to be less liquid, have higher fees, maybe more risk, but also potential for higher returns or uncorrelated returns compared to just stocks + bonds.
Ballpark Average Returns
Here are some historical averages or ranges for different kinds of alternative investments, often net of fees, though sometimes gross:
| Asset Type | Typical Annualized Return Range / Recent Figures |
| Private Equity / Buyouts | ~ 10-25% IRR, often around 14-20% over long horizons. JanneyCom+3Alternatives Investor+3klarphos.com+3 |
| Venture Capital | Similar or sometimes higher variability: perhaps ~ 11-26% in good vintages. Alternatives Investor+2altinvesthub.com+2 |
| Private Debt / Credit | Lower than equity-risk alternatives: ~ 9-14% typical in many reports. klarphos.com+1 |
| Real Assets / Real Estate / Infrastructure | ~ 10-18%, depending on leverage, location, type (commercial, residential, etc.). klarphos.com+2Alternatives Investor+2 |
| Hedge Funds | More moderate: often in the 5-15% range, depending on strategy, but also with higher variability and often higher fees. altinvesthub.com+2JanneyCom+2 |
| Collectibles / Art / Other Niche Alternatives | Very wide variation; some years big gains, but over time maybe 5-10%+, though illiquidity, transaction costs, risk of loss are bigger. Masterworks+1 |
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