Most retail investors in Europe are familiar with stocks and ETFs. These traditional securities are easy to access, liquid, and widely available through popular trading apps. But after investing in public markets for a few years, many investors start to look elsewhere—either to diversify risk or to improve returns. This is where alternative investments come in.
While alternative investments used to be reserved for high-net-worth individuals, this is changing. Today, European retail investors can access a wide range of alternative asset classes, often with low minimums and without the need to meet investor qualification requirements. In this article, we’ll take a look at what these options are and how they work.
What is an alternative investment?
An alternative investment is any investment that falls outside traditional asset classes like stocks, bonds, and cash. These can include real estate, hedge funds, private equity, art, and even wine. Some of these asset classes are relatively liquid, like real estate or cryptocurrencies. Others are highly illiquid and may require locking up your capital for several years, like private equity or collectibles.
Each asset class has its own characteristics, risk profile, and required investment horizon. In general, alternative investments are less regulated, more complex, and harder to value than traditional securities. But they also offer the potential for strong returns and can reduce the overall correlation in your portfolio.
Types of alternative investments available to European investors
Here are the main alternative assets that retail investors in Europe can access today:
1. Real estate
Direct real estate investment (buying rental properties) has long been popular. However, it often requires significant capital, local market knowledge, and active involvement. That’s why platforms offering fractional ownership in residential and commercial real estate have become popular in Europe.
For example, Crowdestate and Reinvest24 offer crowdfunding opportunities in real estate development projects, often secured by collateral. Other platforms, like Brickstarter or Brxs, let you invest in fractions of rental properties and earn passive rental income. These platforms often have minimum investments under €1,000, making real estate accessible without owning entire properties.
2. Private equity
Private equity refers to investing in private companies that are not listed on public exchanges. This can include startup investments, growth-stage companies, or buyout deals. Traditionally, private equity was the domain of institutional investors and venture capital funds, but retail access has improved.
Platforms like Seedrs and Crowdcube allow European investors to invest in early-stage startups from as little as €10. These deals are high risk, but can offer high returns if the company exits or gets acquired. EquityZen and Moonfare also provide access to curated private equity deals or secondary offerings of fast-growing private companies, although they often require higher minimum investments.
3. Hedge funds and alternative strategies
Hedge funds pursue non-traditional strategies such as long-short equity, market neutral, or macro trading. These funds are typically open only to professional investors, but some retail-friendly alternatives have emerged.
For example, UCITS-compliant hedge fund products are available through European brokers. These funds follow hedge fund-like strategies while meeting stricter investor protection rules. Another approach is to invest in copy trading platforms or social trading networks where traders use algorithmic or multi-strategy models, giving access to similar return profiles with more transparency and liquidity.
4. Commodities
Commodities like gold, silver, oil, and agricultural products are classic diversifiers in a portfolio. Physical ownership (e.g. buying gold bullion) is an option, but often impractical.
Instead, most investors prefer to access commodities through ETCs (Exchange-Traded Commodities) or commodity-focused funds. These are widely available via European brokers. Platforms like BullionVault also allow fractional investment in physical gold stored in secure vaults, giving the benefits of physical gold without logistical burdens.
5. Art and collectibles
Investing in art used to require knowledge of the art world, access to galleries, and large amounts of capital. But fractional investment platforms have made this asset class more accessible.
Masterworks, for example, lets retail investors buy shares of blue-chip artworks, while others offer fractional ownership in rare watches, luxury handbags, or sports memorabilia. Although these assets are illiquid and valuations can be subjective, some investors see them as a long-term store of value or inflation hedge.
6. Cryptocurrencies and tokenised assets
Cryptocurrencies are one of the most widely known alternative investments. Bitcoin, Ethereum, and thousands of other coins are available through popular platforms like Binance or Kraken. These are highly volatile, speculative assets but are also liquid and easy to access.
Beyond standard crypto, a new class of tokenised assets is emerging. These include real estate-backed tokens, tokenised art, and DeFi products. These assets blur the line between traditional investments and blockchain-based infrastructure, offering new ways to access yield and exposure to alternative markets.
7. Wine and spirits
Fine wine, whiskey, and other rare spirits have been recognised as niche investment opportunities. Historically, performance has been surprisingly consistent—fine wine indexes have outperformed many traditional indexes over long time frames.
Platforms like WineFi, Cult Wine Investment, and WineCap offer access to managed wine portfolios or allow users to pick individual bottles. These assets are illiquid and may have high storage and insurance costs, but they also provide a non-correlated return stream and strong long-term price appreciation potential.
Things to consider before investing in alternatives
Before diving in, it’s important to consider a few factors:
- Liquidity: Many alternative investments are illiquid. Your money may be locked in for several years.
- Valuation and transparency: These investments often lack clear market pricing and may be harder to evaluate.
- Regulation: Many platforms and products fall outside the scope of MiFID II or other European financial regulations.
- Taxation: Tax treatment can vary by country and asset class. Make sure you understand how gains will be taxed.
Holding alternatives through an Investment Purpose Vehicle (IPV)
For European investors who want to structure their alternative holdings more efficiently, an Investment Purpose Vehicle (IPV) like the one offered by Investor 2.0 can be a smart solution. This legal entity is designed specifically for investing, allowing you to consolidate various asset classes—such as private equity, real estate crowdfunding, or crypto—under a single structure. Holding investments through an IPV can help reduce personal liability, simplify reporting, and offer more flexibility in tax planning. Investor 2.0 makes it easy to set up and manage your own IPV, even if you’re just starting to explore alternatives.
In conclusion, alternative investments offer new opportunities to diversify your portfolio and access returns that don’t follow public market cycles. Thanks to technology and new platforms, European retail investors now have more access than ever to previously exclusive asset classes. But with this access comes the need for due diligence, a long-term outlook, and careful consideration of liquidity and risk.
As with all investments, there is a risk to lose capital so start small, do your research, and make sure the investment fits your overall strategy and risk appetite.
