By Matthew Vegari, Head of Research
The chart-busting growth of alternative assets over the past decade has prompted many asset managers to increase their allocations to a wide range of private credit, equity, real estate, and hedge fund strategies. Multiple surveys and reports, including our recent Rise of Alternatives analysis, have commented on this phenomenon. But few (if any) have had access to Clearwater’s database of nearly 400 insurers representing $4.4 trillion in combined AUM (as of August 2025).
Clearwater’s Research Desk recently published a detailed report underpinned by this data to 1) explore the alts universe at large 2) zoom in and quantify how alts have grown in insurers’ portfolios 3) chart the distribution of exposure to alts and 4) investigate which allocations are being downsized to make room in portfolios. Using this report, asset managers can benchmark their portfolios against their peers, review the current and historical make up of private assets, and decide whether, like the wider industry, alts are still an “alternative” strategy or have become a core part of their portfolios.
The term “alternatives” covers a broad range of assets and can mean different things to different investors. For this report, Clearwater kept the definition reasonably broad to mean investments outside of publicly traded equity and fixed income securities (among a few other restrictions). Using Clearwater’s anonymized data for our group of nearly 400 insurers, the Research Desk found that overall holdings at Clearwater have grown from around $180 billion in 2018 to nearly $900 billion in 2025, as illustrated in the graph below. Private credit makes up more than 80% of these holdings, which can be further broken down into private- placed corporate bonds, mortgage loans, and limited partnerships.
Aggregates do not tell a full (or particularly compelling) story. Further analysis shows significant variation in alts exposure among Clearwater’s insurance base. While alts comprise 20% of total assets under management for these insurers, the current median allocation is closer to 10%, up from 5% in 2018.
But medians and averages can be equally deceiving. The gap between the 25th and 75th percentile of alts holdings is wide and growing, and even the lower bound has increased since 2018. Further details in the report include distribution by type of insurer and size of invested assets.
Has the growth in alts simply paralleled the overall growth in invested capital? Continuing with the interquartile comparison, there has been a positive shift in allocations from public to private markets since 2022, with an even greater decline in public market allocations, as shown in Figure 3.
While there is no one-size-fits-all or even fits-most strategy for alts, the pattern across every size and type of insurer has been a steady increase in alts allocations over the past decade. With alts now forming a cornerstone in institutional investor portfolios, there is growing need for technology that allows investors to measure exposures, scenario plan, and act promptly to balance capital, risk, and regulatory needs—all in one place.
If you are interested in additional details and analysis of alternative investment definitions, allocations, and strategies, download the Clearwater Research Insight: Are “alternatives” still alternative?
The insights in this report are drawn from Clearwater’s platform, where trillions in assets across thousands of firms are recorded and reconciled daily. The underlying data has been cleaned, anonymized, and aggregated to reveal meaningful trends in insurer allocations and investment strategies over time. While each portfolio is unique, these collective patterns provide a clear view of how insurers are positioning their portfolios amid evolving market dynamics.