A Quiet Wall Street Force Fueled $17 Trillion Alternatives Boom

A small circle of investment consultants played a central role in the multi-trillion-dollar push into private markets, steering US pension funds toward private equity, real estate and hedge funds, according to a new study.

The shift over the past two decades was driven less by changes in pension fundamentals than by the recommendations of these advisers, researchers at Harvard University and Stanford University found. Portfolios moved because consultants encouraged pensions to chase higher returns in alternatives.