Introduction to alternative investments: A 2026 guide

An alternative investment is a type of asset that doesn’t fall into the traditional categories of stocks, bonds, or cash. While alternative assets can add different return streams and help you diversify, they’re often more complex than standard savings or equity products.This page explores the main types of alternative assets and how they work within the Irish market.

The information provided here is for informational and educational purposes only and does not constitute financial advice. Please consult with a licensed financial adviser or professional before making any financial decisions. Your financial situation is unique, and the information provided may not be suitable for your specific circumstances. We are not liable for any financial decisions or actions you take based on this information.

When some people think of investments, they might picture traditional assets like stocks and shares or bonds. Alternative investments, or alternatives, are any types of asset that don’t fall into these conventional categories. Examples include private equity, hedge funds, property, commodities such as gold, and collectible items.

Because they provide so many different ways to invest, investors might pursue alternative assets as a way of diversifying their portfolio and accessing opportunities they wouldn’t find with traditional investments.

Options for investing in alternative assets include:

• Private equity and hedge funds: These options involve investing in private companies or funds not traded on public markets. They are typically available to institutions or high-net-worth investors.

• Structured products: These are tailored investment strategies that combine various financial instruments to meet specific financial goals, offering customised solutions for investors.

• Real estate: Investing in property, either directly or through funds or crowdfunding, can provide rental income and potential long-term growth.

• Crowdfunding: By pooling funds with others, investors can support new projects or startups, gaining exposure to innovative ventures.

• Gold and other precious metals: Gold is sometimes seen as a potential hedge against inflation, with some investors believing it to be a so-called safe haven in volatile markets*. However, the results depend on what form the investment takes (the physical metal or exchange-traded funds, for example) and market conditions.

• Peer-to-peer lending: This allows you to lend money directly to individuals or businesses through online platforms, offering an alternative to traditional banking but without the protections it typically offers.

• Cryptocurrencies: Digital currencies operating on decentralised networks represent a modern, evolving field of investment with growing EU regulation, but also significant volatility.

• Farmland: Investing in farmland means investors have the chance to earn a regular income if the farm’s produce and sales are profitable, but this would be considered a fairly specialised holding.

• Collectibles and artwork: Some people may already be investing in alternatives without realising it. Collections of art, memorabilia, and other items can be considered alternative assets if they increase in value over time.

The table below outlines the main differences between alternatives and more traditional investment types.

The term alternative investments can mean different things depending on how an asset is structured. Exchange-traded funds (ETFs), stocks, and bonds are typically considered traditional investments, but they can also give exposure to commodities or other non-traditional assets.

With gold investments in Ireland, for example, investors can get exposure in very different ways: 

• Buying coins or bars, which may involve storage and insurance costs

• Buying an ETF that tracks physical gold, which is relatively liquid and easy to trade

• Buying shares in gold miners, which is an indirect and often more volatile route**.

The approach used can affect how the asset is regulated, who can invest, and whether it’s subject to capital gains tax.

An alternative investment fund (AIF) is a type of investment where money from multiple investors is pooled together to invest in non-traditional assets like private equity, real estate, or hedge funds. Instead of investing in these assets individually, AIFs allows investors to gain exposure to a variety of alternatives in one go.

What sets alternative investment funds apart is their regulated setup. Special EU regulations are in place to make sure AIFs are managed properly and transparently. Because of this framework, AIFs can offer a more structured approach to diversification and risk management than investing in alternative assets on your own.

For individual investors, alternative investments tend to make up a small, specialist part of a portfolio.

When it comes to how alternative investments are used, there are a few general trends:

• They are more commonly included in the portfolios of  institutional investors (for example, pension funds), as well as high-net-worth individuals who may be willing to take on higher levels of risk and meet the minimum requirements.***

• Ireland has established itself as a key location for alternative investment funds in Europe, with over 3,400 AIFs authorised by the Central Bank of Ireland.

• In Ireland, alternative investments typically include private equity, private credit, real estate, and infrastructure, with specialist areas such as aviation and digital assets becoming increasingly common.

• ELTIFs (European long-term investment funds), which are considered alternatives because they invest in non-traditional assets like infrastructure or private equity, are becoming available to individuals. Until recently, only institutional and high-net-worth investors could access them, but new rules aim to make them accessible to retail investors as well.

As we’ve seen, effective alternative investment management requires a deep understanding of non-traditional assets and strategies. Whether it’s a good idea or not ultimately depends on the investor’s financial situation, their level of knowledge, and their ability to manage the associated risks.

Here are some potential advantages and disadvantages:

Advantages

• Diversification: Because of the wide range of non-traditional asset types, investors often use them to add variety to their portfolio.

• Potential for higher returns: They may offer the chance for better returns compared to traditional investments.

• Hedge against inflation: Some investors believe alternative assets like commodities or real estate protect against inflation by maintaining or increasing in value as prices rise.

Disadvantages

• Higher risk: They come with greater risks due to their complexity and potential for significant losses. For example, private equity or hedge funds may tie up capital for years, and if the underlying investments underperform, investors could lose a substantial portion of their money.

• Illiquidity: Alternative investments can be harder to sell quickly if you need cash.

• Higher costs: Management fees, performance fees, and minimum investments can be higher than for traditional assets.

• Market sensitivity: Their value can fluctuate with the economy, interest rates, and inflation, and rules and regulations can vary depending on the asset.

This information does not constitute financial advice. You should always do your own research to ensure that investments are right for your specific circumstances.

In Ireland, alternative investments are taxed differently compared to traditional asset classes like stocks and bonds. The exact tax treatment depends on the type of alternative asset and how it is structured.

• Real estate: When investing in property, profits from any property sold are generally taxed at a rate of 33%. Rental income from real estate is treated as ordinary income, and tax rates can vary depending on your total earnings.

• Private equity and hedge funds: These alternative investments are usually subject to an Exit Tax of 38% on the gains when you exit the fund. This can vary based on the fund’s structure.

• Peer-to-peer lending: Interest income from peer-to-peer loans is treated as ordinary interest income and may also be subject to the Universal Social Charge (USC) and Pay Related Social Insurance (PRSI).

Tax treatment varies depending on your personal circumstances and the structure of the investment. You might consider consulting a qualified tax professional before making investment decisions.

In Ireland, alternative investments are regulated to ensure proper and transparent management. The Central Bank of Ireland oversees the regulation and authorisation of various investment vehicles, including unit trusts, investment companies, and partnerships.

For alternative investment funds, the Alternative Investment Fund Managers Directive (AIFMD) sets additional rules. Alternative funds must adhere to strict organisational and operational standards, ensuring transparency and ethical business conduct.

Some investors choose to balance their portfolios with lower-risk options such as savings accounts.. Raisin works with partner banks that are part of their respective country’s deposit guarantee scheme. Each bank protects eligible deposits up to €100,000 per person, per bank under its national deposit guarantee scheme, as required by EU law.

*https://www.ecb.europa.eu/press/financial-stability-publications/fsr/focus/2025/html/ecb.fsrbox202505_02~7f616fcd3f.hu.html

**https://www.irishtimes.com/business/2025/10/21/should-you-still-buy-gold-the-insane-rush-may-have-some-way-to-go/

***https://institutional.fidelity.com/institutions/insights/topics/investing-ideas/a-study-of-allocations-to-alternative-investments-by-institutions-and-financial-advisors