The $17 Trillion Alts Boom Gets Blasted as ‘Costly and Wasteful’

Wall Street calls it a golden age for alternative assets. Richard Ennis, who spent decades helping pensions and endowments devise modern portfolios, calls it a costly delusion draining billions from portfolios — one that will come undone in the coming decades.

For years, the pitch to institutional investors has been the same: passive returns on stocks and bonds are fine as they go, but to thrive money managers need hedge funds, private assets and other alternative vehicles. Yet after dissecting the data, Ennis — who helped pioneer the art of investment consulting — finds there is surprisingly little evidence ...