Alternative investment is a term typically used by investors to describe investments other than stocks and bonds. Strategies commonly classified as alternative investments include private equity, leveraged buy-out (LBO) funds, arbitrage strategies, hedge strategies, and "event driven" strategies. Some people also classify real estate and venture capital in the alternative investment category. The benefits of alternative investments include potentially higher returns, reduced volatility, diversification benefits resulting from low correlation with other investments, and in some cases more liquidity than some other investments like real estate and venture capital.


