Alternative asset managers have built enormous businesses by tapping into institutional capital. Institutional investors like pension funds, endowments, and insurance companies have an estimated $135 trillion to $140 trillion pool of investable capital. These investors have been increasingly allocating more of their portfolios to alternative investments like private equity funds, hedge funds, and private real estate and credit investments. They're earning higher returns and experiencing lower relative volatility in alternatives compared to the public stock and bond markets.

However, institutions control slightly less than half of the world's wealth. Private investors hold the other half, estimated to be between $140 trillion and $150 trillion. These investors only represent about 16% of the assets under management (AUM) held by alternative investment managers. Thus, high-net-worth individuals represent a massive growth opportunity for leading alternative asset managers Blackstone (NYSE: BX), Brookfield Asset Management (NYSE: BAM), and  (NYSE: KKR). That's leading them to create products geared toward these investors. Tapping into this market will help grow their AUM, fee-related earnings, and dividends to shareholders. 

Blackstone has been an early leader in tapping individual investors. The leading global alternative asset manager has developed several investment vehicles for retail investors. The most notable is its non-traded REIT, Blackstone Real Estate Income Trust (BREIT), which it launched in 2017. The company also has a retail-focused private credit fund (BCRED).

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Source Fool.com