How to make non-traditional assets work for you
By Eric Derrington, Senior Vice President and Senior Portfolio Manager for Whittier Trust Company
When people talk about asset classes, they often cite cash, bonds, and publicly traded stocks. “Alternative investments” are sometimes added as a catchall category—but alternatives are far from homogeneous.
At their core, alternative investments generally refer to private, non-traded assets, often in privately held companies and entities. These opportunities span a wide range, including real estate, private equity and venture capital, hedge funds, and private loans and debt financing. Simply put, they represent a different way of owning assets. What follows is an overview of how Whittier Trust approaches this often complex—and potentially rewarding—investment category.
Demystifying Alternative Investments
Alternative investments can play a crucial role in achieving goals such as diversification, inflation hedging, and generating enhanced returns. While return potential is often the primary motivator, at Whittier Trust, we view alternatives as an extension of our public-market investing. Every opportunity is evaluated through the same rigorous vetting process to determine whether it merits our clients’ capital.
Diversification Beyond Public Markets
One of the key benefits of alternative investments is diversification. Today, the top 10 companies in the S&P 500 represents more than a third of total U.S. market capitalization, while the overall number of publicly traded U.S. companies has declined sharply over the past three decades—from more than 8,000 in the mid-1990s to less than 5000 in late 2025. With fewer public companies available, private markets can offer access to growth opportunities that would otherwise be out of reach.
Some of the most sought-after companies remain private for decades. SpaceX, for example, had been privately held for more than 20 years. As a result, more of the value creation that used to happen in public markets is occurring while companies are still private. Historically, access was limited to venture funds, but today investors may often participate through special purpose vehicles (SPVs) alongside Venture investors.
Setting Realistic Expectations
For individuals or families with substantial balance sheets, alternative investments can be a powerful tool for long-term wealth building—but only when approached with the right expectations. These investments are not appropriate for every investor or life stage. Patience and a long-term outlook are essential, as alternatives are inherently illiquid. Investors who exit early may need to sell at a discount or forgo a portion of their potential return.
There is no universal formula for how much of a portfolio should be allocated to alternatives. Portfolio construction must reflect each client’s liquidity needs, goals, and risk tolerance. Our focus is on identifying quality businesses we would want to own for the long term—companies we would continue to hold even after they enter the public markets.
Alternative investments are best approached with an owner’s mindset rather than a trader’s. You are investing in a business, not making a short-term bet. Because these assets are typically valued quarterly rather than daily, they may also reduce emotional volatility compared to public markets.
Alternatives can be particularly well-suited for multi-generational capital, where liquidity needs are often lower. Investors focused on benefiting children or grandchildren—and willing to commit capital for many years—may find alternatives especially compelling. This long-term orientation is one reason endowments allocate heavily to alternative assets. A trusted advisor who understands your goals and life stage can be critical in determining the right mix.
Advantages of a Multi-Family Office Approach
Building a diversified alternative portfolio often requires investing across multiple managers, strategies, and vintages—a process that can demand significant capital. Even ultra-high-net-worth investors may find minimum investment sizes prohibitive.
Whittier Trust addresses this challenge by working with vetted asset managers and creating aggregated client vehicles. For example, a $10 million minimum investment may be divided among multiple clients, lowering the entry point while still allowing for diversification across vintages. These investments typically require a 10- to 15-year time horizon.
We often see clients allocate at least 10% of their portfolios to alternatives; smaller allocations may involve significant complexity with limited benefit. In general, we advise against allocations exceeding 40%.
Asset Class Balance
When introducing alternative investments, it’s important to think in terms of overall portfolio balance. Rather than carving allocations equally from stocks and bonds, alternatives often make more sense as part of the portfolio’s growth component. Viewing them as an extension of equity exposure—rather than a separate category—can lead to more thoughtful portfolio construction.
Gatekeeping and Due Diligence
Whittier Trust typically introduces alternative investment opportunities to clients, allowing us to conduct thorough due diligence and assess both financial soundness and opportunity cost.
Clients are sometimes approached by friends, family members, or acquaintances seeking investment capital. In these cases, we evaluate not only the viability of the opportunity but also what the client may be giving up by committing capital elsewhere. When appropriate, we can also help clients decline investments tactfully, preserving personal relationships while protecting their financial interests.