Glossary

Alternative Assets

Finance

Definition

Alternative assets are investments outside traditional public equities, bonds, and cash-covering real estate, private equity, infrastructure, commodities, and renewable-energy projects . In portfolio construction, alternatives offer diversification because their returns often have low correlation with public markets, potentially smoothing volatility and enhancing risk-adjusted performance. Within sustainable finance, renewable-energy investments-such as equity stakes in solar farms , wind projects , or energy-infrastructure funds -have emerged as a fast-growing subset of alternative assets. These projects typically feature long-term power-purchase agreements that generate steady, inflation-linked cash flows, providing investors both income and exposure to the global transition toward clean energy.