Alternatives Knowledge Base

Asset Classes – Section Index

Properties2
descriptionOverview of the major alternative investment asset classes covered in this bundle.
tagsasset-classes, index, overview

2 min read

Asset Classes – Section Index

What This Section Covers

Each file in this section explains what an asset class is, how it generates returns, how it is typically structured, and what risks and metrics are most relevant. Read this section after completing Stages 1–2 of the Learning Path, once you understand fund mechanics and GP/LP economics.

Files in This Section

FileAsset Class
Private EquityBuyouts, venture capital, and growth equity
Private CreditDirect lending, mezzanine, and distressed debt
Hedge FundsLiquid alternatives across diverse strategies
Real EstateCommercial and residential property via funds
InfrastructureLong-duration essential assets
CommoditiesPhysical goods and futures-based exposure
Digital AssetsCryptocurrencies and tokenised instruments

Suggested Reading Order

Read in this order to build from most-studied to least-studied asset class:

  1. Private Equity — the reference asset class; most concepts originate here
  2. Private Credit — contrasts with PE on seniority, income vs capital return
  3. Hedge Funds — contrasts with closed-ended funds on liquidity and strategy
  4. Real Estate — introduces appraisal-based NAV and open/closed structure variation
  5. Infrastructure — shares PE structure but with different risk/return profile
  6. Commodities and Digital Assets — more specialised; read last
  • Private Equity — the clearest application of waterfalls, IRR, and J-curve
  • Private Credit — most relevant for understanding floating rates, PIK, and credit risk
  • Hedge Funds — most relevant for understanding strategy diversity, prime brokerage, and liquidity terms
  • Real Estate — most relevant for understanding appraisal-based NAV and open-ended fund risk

Self-Check Questions

  1. What distinguishes private equity from private credit in terms of return type (income vs capital)?
  2. Why does a hedge fund’s lock-up period matter as much as its strategy?
  3. What makes infrastructure a different risk profile from a PE buyout, even if both use debt?
  4. Why is real estate NAV particularly susceptible to stale price risk?
  5. What is PIK interest and why does it matter for private credit fund NAV?
  • Concepts — J-curve, waterfalls, and carried interest apply directly to PE and credit
  • Fund Structures — how asset classes are packaged into investable vehicles
  • Risk — risk profiles vary significantly across asset classes
  • Metrics — IRR and MOIC dominate PE; yield and loss rate matter in credit

7 items under this folder.