Episode summary
Episode 27: The Role of Alts in Modern Portfolios with Guest Bill Duffy, Fidelity Investments
Alternative Allocations
· · Hosts: Tony Davidow · Guests: Bill Duffy
Summary
Bill Duffy argues that alternative investments are moving from niche to mainstream because three forces are converging: stronger long-term capital market assumptions, better product structures, and a wider set of high-quality managers focused on private wealth. He says Fidelity’s alternative investment platform now covers about $95 billion in assets across non-traded REITs, BDCs, tender offer funds, interval funds, and LP products, and he frames education as the key to helping advisers move from curiosity to implementation.
A major theme is accessibility. Duffy says evergreen private market vehicles, lower minimums, 1099 reporting, and immediate exposure to seasoned portfolios have reduced barriers that once kept retail clients out of private markets. He and the host also note that adviser adoption remains fragmented, with surveys suggesting anything from no allocation to more than 10%, while the industrywide “typical” allocation is still closer to 5%.
The discussion turns to what still holds adoption back: perceived liquidity needs, operational complexity, and limited data for portfolio construction. Duffy says the next step is better modeling tools, more end-investor education, and product innovation that could eventually support private markets in model portfolios, target date funds, and even defined contribution plans.
Key takeaways
- Duffy says the biggest growth drivers are better capital market assumptions, new evergreen structures, and more experienced managers entering private wealth.
- Fidelity’s platform now oversees about $95 billion in alternative-investment assets, according to Duffy.
- He says adviser adoption is still highly fragmented, with industrywide allocations closer to 5% despite some surveys showing higher usage.
- Duffy identifies perceived liquidity needs as the most common barrier to alts adoption and says education must address true investor liquidity needs.
- He sees model portfolios and defined contribution plans as promising but still early applications for private market exposure.
Notable quotes
“Today I oversee the alternative investment platform that RAAS and broker dealers use to access alts through Fidelity”
“We're about 95 billion in assets today covering non-traded REITs, BDC's, tender offer funds, interval funds up through to your typical LP products”
“I think there's really three considerations that my team believes is driving the growth we've been seeing over the last few years”
“According to a Crueli 2024 report, about 25% of advisers indicate that they allocate over 10% of their client portfolios to alternative investments”
“Definitely number one, the perceived need for liquidity is the most common sited barrier to beginning to adopt alternative investments”
How the episode opens
This is Alternative Allocations by Franklin Templeton, a monthly podcast where we share practical, relatable advice and discuss new investment ideas with leaders in the field. Please subscribe on Apple, Spotify, or wherever you get your podcast to make sure you don't miss an episode. Here is your host, Tony Davidau. Welcome to the latest episode of the Alternative Allocations podcast series. I'm thrilled to be joined today by my good friend Bill Duffy. Bill, thanks for joining us.
Absolutely. Thank you for inviting me, Tony. — And we've been talking about doing this for a while. Share a little bit about your background. What do you focus on today?
Absolutely. I've been focused on alternative investments for about the last 15 to 20 years. Tony and I go way back over a decade ago where we were first talking about how do we develop educational content to enable advisers to even want to learn about alternative investments.
Today I oversee the alternative investment platform that RAAS and broker dealers use to access alts through Fidelity. We're about 95 billion in assets today covering non-traded REITs, BDC's, tender offer funds, interval funds up through to your typical LP products. And you also have another role and I think that's kind of an interesting role as well.
You're involved with IPA, another industry organization kind of helping us in this journey to educate advisers about everything that's going on in this ever evolving space. Maybe talk a little bit about IPA and the mission. The IPA is the leading trade group that's focused on enabling the private wealth community to access alternative investments.
We focus a lot of our efforts on education as well as advocacy. Many of our member firms represent asset managers such as a Franklin Templeton or distribution partners such as Fidelity as well as other stakeholders throughout the ecosystem.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- alternative investments
- liquidity concerns
- private markets
- alts education
- defined contribution plans
Companies and tickers mentioned
- SCHW
- BEN
- Fidelity Investments
- Charles Schwab & Co., Inc.
- Franklin Templeton
Watch the episode
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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Alternative Allocations, this episode and its artwork belong to Franklin Templeton. Octagon is not affiliated with the show; this page is an independent summary.
