Alternative investment in 2025: trends and prospects for a transforming market
The alternative investment markets are experiencing exponential growth like never before. Investors are focusing on these types of assets to explore new markets, achieve higher returns, and diversify their portfolios. According to consulting firm KPMG, global alternative investment is expected to grow annually by 8.4%, reaching a total asset volume of €16 billion by the end of 2024 and potentially €24.5 billion by 2028. The evolution of these markets is set to consolidate in 2025, which is anticipated to be a pivotal year for alternative assets.
The global economic context is facing a moment of uncertainty fueled by geopolitical tensions, including the war between Ukraine and Russia, which drove inflation higher due to rising energy prices; the conflict in the Middle East; and the return of Donald Trump to the U.S. presidency with his aggressive tariff policies. This global scenario, combined with weak macroeconomic forecasts, points to slow market growth in 2025.
As a result, investors are compelled to seek new ways to achieve returns, and alternative markets are emerging as a viable option. These markets encompass a wide range of sectors and assets that help diversify portfolios and maximize returns:
- Infrastructure
According to Preqin, a data analysis consulting firm, global non-listed infrastructure assets are expected to reach $2.4 trillion by 2029. The role of this market strategy in energy transition efforts will significantly drive fundraising and operations.
- Private Markets
Strategies aligned with long-term megatrends such as AI and decarbonization will be especially attractive to investors, according to Schroders. Furthermore, the stabilization of interest rates will support investment in private debt.
- Venture capital
In this area, Preqin also forecasts an annual growth rate of 11.1% through 2029. Artificial intelligence will be a key driver of this growth.
- Digital assets
Digital assets will gain prominence due to their potential to diversify investment portfolios with high-growth opportunities. These include innovative solutions in sectors beyond finance, such as enabling the fractionalization of illiquid assets into digital tokens to enhance liquidity.
- Real estate
Data consultants predict that private real estate assets will continue their steady growth, reaching $2.7 trillion by 2029.
The emergence of new players
Alternative investment has also been undergoing changes for years, adapting processes to technological advancements and new market trends, acting as a growth engine. The presence of fintech companies like Urbanitae in the market has multiplied investment solutions from various perspectives. Specifically, for the real estate sector, it has driven and facilitated property search and management, thanks to platforms that simplify operations; digital payment solutions, streamlining contractual processes; data analysis; and added value through agile and reliable analysis enabled by big data and advanced technological solutions.
New trends in alternative investment: real estate crowdlending and asset tokenization
The rules of real estate investment in Spain have changed. Where buying and selling properties was once the norm, there are now new and diverse alternative investment options that allow for high returns with lower risk and effort. One of the most prominent options is crowdlending, a strategy based on collective financing through loans for projects. This allows investors to participate in large-scale operations with small amounts of money. At Urbanitae, this strategy accounted for nearly half of our financed projects in 2024, enabling clients to invest in real estate markets with entry tickets starting at €500.
This alternative financing model has grown in recent years, driven by technological innovation through digital asset tokenization, which directly impacts how investors access this financial product. Some crowdlending platforms are promoting tokens to represent investor shares, registering their rights and returns through blockchain. Tokenization could increase the liquidity of these investments, though it is not essential to establish secondary markets where shares can be sold or exchanged before the project’s completion if desired.
Challenges and opportunities for the coming year
The constant growth of the alternative investment market presents significant challenges that need to be addressed to drive and solidify the maturity of a sector that still has significant development potential. Among them, the importance of financial education stands out, emphasizing the in-depth knowledge of small and medium investors as one of the foundations for business growth. On the other hand, regulation will also play a crucial role due to the need for greater legal security and a robust legal structure to protect both investors and institutions. Advances in security, with a strong commitment to innovation in cybersecurity and the support of blockchain, will drive and facilitate asset protection, enhance transaction transparency, and provide added value such as transaction traceability.
Moreover, sustainability will continue to establish itself as one of the major macro trends in investment decisions, both for individual and institutional investors, despite the anti-ESG movements emerging from countries like the United States. For the real estate sector, new regulations are transforming the way buildings are constructed and managed, aiming to maximize asset value and meet consumer demands.
At Urbanitae, we believe it is essential to understand sustainability trends and adapt our strategy to standards that not only offer attractive financial returns but also contribute to decarbonizing the Spanish housing stock: to date, we have driven the development of over 5,000 new-build homes in Spain and Portugal. Because sustainability is here to stay.w-build homes in Spain and Portugal. Sustainability is here to stay.