Alternative Investments UK: What Options Are Available?

If you've already read our guide to what alternative investments actually are, you'll have the basics covered: assets outside the familiar trio of listed shares, bonds and cash, offering the prospect of better returns in exchange for less liquidity and considerably less protection. That article is the right place to start if you want the fundamentals, the risks and the eligibility rules explained from scratch.

This article picks up from there. Rather than explaining what an alternative investment is in the abstract, it maps out what is actually on offer to UK investors today, category by category. Think of it as a directory rather than a deep dive: each section below covers what the asset class involves, roughly how liquid and risky it tends to be, and the kind of investor it usually suits, with links through to more detailed articles where you want to go further.

Private equity

Private equity means buying a stake in a company that isn't listed on a public stock exchange, whether that's a growth-stage business raising capital to expand or a mature company being restructured by a specialist fund. Because there's no daily share price and no market to sell into, private equity investments are typically locked in for five to ten years, and the eventual return depends heavily on the fund manager's ability to grow the business and find a buyer or listing further down the line.

It sits towards the higher-risk end of the alternative spectrum. Minimum investments are often substantial, capital can be called in stages rather than paid up front, and there's a real possibility of losing some or all of the amount invested if a portfolio company fails. It tends to suit investors with a long time horizon who already hold a diversified portfolio of listed assets and are looking to add exposure to companies they can't otherwise access. For a closer look at how it stacks up against property-based alternatives, see private equity versus real estate.

Private and commercial real estate

Property remains one of the more familiar routes into alternative investing, partly because the underlying asset (a building, a development site, a portfolio of units) is easy to picture even when the investment structure is not. Options range from funds that hold a basket of commercial buildings to direct participation in a single development, and from income-focused holdings let to established tenants to ground-up schemes that only pay out once a project completes and sells.

Risk and liquidity vary a lot within this category depending on structure, but most direct and private commercial property investments share the same basic trade-off: your capital is tied up for years rather than days, and returns depend on rental income, capital growth, and how well the underlying asset is managed. It tends to suit investors who are comfortable with property as an asset class and want exposure without the hassle of buying and managing a building themselves. Our commercial property investment guide goes into the different structures in more detail, and our commercial property page lets you see current opportunities side by side.

Property bonds and private credit

Property bonds are worth separating out from real estate investment proper. Rather than buying a stake in a building, you're effectively lending money, usually to a property developer or operator, in exchange for a fixed rate of return over a set term. There's typically no ownership of the underlying property and no secondary market to sell into before the term ends, so your return depends on the borrower being able to repay as agreed.

Private credit more broadly covers lending outside the property sector too, financing businesses that banks are unwilling or unable to serve on the same terms. Both share the same essential appeal: a fixed, predictable-looking return over a defined period, which makes this category popular with income-focused investors rather than those chasing capital growth. The risk sits almost entirely with the borrower's ability to repay, which is why due diligence on security, loan-to-value and the underlying business matters more here than almost anywhere else on this list. Our property bonds guide covers how these work in detail, and you can browse current examples on our property bonds page.

Fixed income alternatives

Beyond property-backed lending, there's a wider universe of alternative fixed income: corporate loan notes, structured products and other instruments that promise a set return rather than a share of growth. These sit somewhere between conventional bonds and the higher-risk end of alternatives, often less volatile than equity-style investments, but still unregulated, still illiquid, and still without any FSCS protection if the issuer fails to pay.

This category tends to suit investors who want the predictability of an income-style return but are prepared to accept credit risk and a lack of liquidity that a bank bond or gilt wouldn't carry. As with property bonds, the quality of the issuer and the terms of the agreement matter far more than the headline rate on offer. Our guide to fixed income investments in the UK sets out the different types available and what to check before committing capital.

Fine art and collectibles

Art, classic cars, rare instruments, watches and other collectibles form a smaller but persistent corner of the alternative market. The appeal is partly financial and partly personal: many investors in this space have a genuine interest in the object itself, not just its potential to appreciate. Values are driven by taste, provenance, condition and scarcity rather than anything as measurable as a company's earnings, which makes pricing far more subjective than most other categories on this list.

Liquidity is often the biggest constraint. Selling a painting or a rare car can take months, and transaction costs, storage, insurance and authentication all eat into returns. This tends to suit investors who are comfortable holding a tangible asset for the long term and who treat the passion element as part of the return, rather than those looking for a straightforward, easily calculated investment case.

Whisky casks and other collectibles

Cask whisky has become one of the more talked-about niches in UK alternative investing over the past decade, built on the idea that maturing spirit in a warehouse gains value as it ages and as demand for rare, well-aged whisky grows. It shares some characteristics with fine art: a tangible asset, a specialist market, and returns that depend on eventual resale rather than any income along the way, but it comes with its own quirks around duty, storage and verifying that a cask genuinely exists and is correctly documented.

It's a market where due diligence really counts, given how much variation there is between reputable brokers and operators making bold projections with little to back them up. Investors tend to come to whisky casks with a genuine interest in the category and a willingness to hold for a decade or more, rather than expecting a quick or guaranteed return. Our whisky investment guide covers how the market works and what to check before buying a cask.

Green energy and infrastructure

Investments in renewable energy projects, battery storage and other infrastructure assets have grown alongside the UK's push towards net zero. Structures vary from direct equity stakes in individual projects to funds that hold a portfolio of assets, and returns can come from a mix of long-term contracted income and capital growth as projects mature or are sold on.

This category often appeals to investors who want their capital to support the energy transition alongside a financial return, though it's worth remembering that infrastructure projects carry construction, regulatory and operational risks of their own, and the long asset life usually means an equally long investment horizon. It suits patient investors more than those looking for a quick turnaround.

Gold and precious metals

Gold sits apart from most of the other categories here because it's genuinely liquid. Physical gold and gold-backed products can typically be bought and sold far more easily than a stake in a private company or a cask of whisky, which is why it's often held as a diversifier rather than a growth play. It generates no income of its own, so the case for holding it rests on its long history as a store of value and its tendency to hold up when other assets fall.

It tends to suit investors who already have exposure to higher-risk, illiquid alternatives and want something more liquid to balance the portfolio, rather than those looking for it to be the main driver of returns.

Working out which options fit you

None of the categories above is inherently "better" than the others; they simply behave differently, and the right mix depends on your goals, your time horizon and how much illiquidity and risk you're prepared to accept. Before you start narrowing down individual providers, it's worth comparing these categories against each other on the things that actually matter to you: minimum investment, typical liquidity, and whether you're after income or growth. We cover that comparison in detail in our guide to the best alternative investments for UK investors, and if the eligibility rules are still unclear, our explainer on who qualifies as a self-certified sophisticated investor is worth reading first. It's also worth reminding yourself that none of these carry FSCS protection, a point we cover fully in our guide to whether alternative investments are safe.

Once you have a sense of which category, or categories, suit your circumstances, our comparison tool can help you see specific opportunities within them side by side.

This article is for general information only and does not constitute financial advice. Alternative investments carry a high degree of risk, including the potential loss of capital, and are not suitable for everyone. If you are unsure whether an alternative investment is right for you, seek independent advice from an FCA-authorised financial adviser.