Masters in Business

Alternate Investing: Masters in Business with Kristin Olson

November 12, 2025

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  • The alternatives asset class has matured significantly, broadening beyond hedge funds to encompass private equity, private credit, and real assets like infrastructure, which now represent over $500 billion managed by Goldman Sachs. 
  • For individual investors, a target allocation of around 20% to 27% in alternatives is becoming a standard recommendation, though the complex process of allocating capital over time requires careful planning to avoid cash drag. 
  • Innovation in alternative investing structures, such as evergreen and open-ended funds, is simplifying access for individual investors by removing the complexity of traditional closed-end capital calls and distributions. 
  • Recent college graduates interested in alternatives or wealth management should focus on becoming highly educated using readily available information and actively networking. 
  • The rigor and systematic approach developed by Goldman Sachs for advising clients on sizing and building alternative investment portfolios is something the guest wishes she had applied to her personal investing earlier. 
  • The conversation concludes with host Barry Ritholtz thanking Kristin Olson, Global Head of Alternatives for Wealth at Goldman Sachs, and promoting his book and the podcast's availability. 

Segments

Kristin Olson’s Career Start
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(00:01:56)
  • Key Takeaway: Kristin Olson joined Goldman Sachs directly after graduating from Georgetown and spent her early career in investment banking before pivoting to the nascent alternatives group.
  • Summary: Olson started at Goldman Sachs 27 years ago as an analyst in the Financial Institutions Group (FIG) after graduating from Georgetown. She worked on the Goldman.com project in 2000 before being moved into the Investment Management division, which housed what was then called the ‘special investments group’ or alternatives. She has been running the Alts group for the past 24 years.
Scope of Alternatives at Goldman
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(00:06:47)
  • Key Takeaway: Goldman Sachs manages over $500 billion in private alternative assets, a business that has existed for over three decades.
  • Summary: The alternatives space has matured significantly, now encompassing private equity (buyout, growth, venture), private credit (direct lending, distressed), and real assets like real estate and infrastructure. Despite inflows, alternatives remain a fraction of the size of public markets, yet they capture significant economic activity driven by private companies.
Shifting Public vs. Private Markets
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(00:08:49)
  • Key Takeaway: The shrinking number of U.S. public companies necessitates investors look toward private markets to tap into other sources of economic growth.
  • Summary: High-quality, high-growth companies are staying private longer due to increased liquidity in private markets, evidenced by innovations like continuation vehicles. While large, marquee companies will likely still go public for massive capital needs, the average time to IPO has extended significantly.
Wealth Management and Alt Allocation
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(00:11:02)
  • Key Takeaway: Goldman Sachs has advocated for a 20% to 27% allocation to alternatives for moderate-risk wealth management clients for over two decades.
  • Summary: The intersection of wealth management and alternatives has been a focus at Goldman Sachs for over 30 years, predating the broader institutional adoption seen elsewhere. The recommended allocation to alternatives has increased from about 20% in 2001 to closer to 27% today for moderate-risk clients. Funding this shift often comes from the fixed income bucket, especially when seeking high single-digit yields in private credit.
Navigating Illiquidity and Capital Calls
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(00:20:06)
  • Key Takeaway: Achieving target alternative allocations in closed-end funds requires a multi-year, laddered commitment strategy to manage capital calls without incurring cash drag.
  • Summary: The hard part of allocating to traditional alternatives is timing the capital calls over a 5-to-10-year fund life to reach the target percentage. Advisors must build a laddered portfolio so that by year five or six, the portfolio becomes self-funding, avoiding the return dilution caused by sitting in cash waiting for capital calls.
Implementation Methods for Alternatives
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(00:24:26)
  • Key Takeaway: Goldman Sachs implements alternative exposure for clients through three methods: in-house strategies, open-architecture vehicles like fund-of-funds, and direct single-name access.
  • Summary: Diversification across strategies, managers, and vintage year is crucial for individual investors in alternatives. The firm utilizes its internal $500 billion alternative capability alongside external partnerships to provide clients with varied implementation methods.
Risk Assessment and Secondaries
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(00:30:24)
  • Key Takeaway: Secondary private equity funds offer significant diversification, often holding thousands of underlying companies, and allow investors to potentially buy existing stakes at a discount to fair value.
  • Summary: Risk assessment involves analyzing track records, team stability, and investment concentration; secondaries provide immediate diversification because the underlying capital is already invested. Secondaries include LP-led transactions (driven by an investor needing liquidity) and GP-led transactions, also known as continuation vehicles.
Survey Insights on Investor Behavior
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(00:36:46)
  • Key Takeaway: Millennials are driving a significant shift toward alternative investments, often citing social media as their primary source for financial planning information.
  • Summary: The inaugural survey showed participation in alternatives extends down to the $1 million to $5 million investable asset level, which was surprising. Households with $10 million or more typically engage two different advisors, suggesting a desire for diverse viewpoints at the highest wealth levels. The reliance on social media by younger investors highlights a critical need for education delivered on those platforms.
Current Themes in Private Markets
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(00:46:05)
  • Key Takeaway: Current excitement in private markets centers on AI-driven innovation across sectors and strong client demand for private credit due to its high single-digit yield potential.
  • Summary: The growth of digital infrastructure, including data centers supporting AI, is a thrilling area within real assets, offering inflation protection benefits. Private credit is highly sought after because it allows investors to sit near the top of the capital structure, offering protection and quarterly cash flow with high single-digit yields.
Overlooked Risks in New Structures
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(00:51:26)
  • Key Takeaway: Investors in new perpetual evergreen alternative funds must scrutinize the manager’s origination capabilities to ensure they can deploy capital effectively and avoid performance dilution from cash drag.
  • Summary: A key overlooked risk is whether managers of large, perpetual funds have sufficient origination pipelines to invest incoming capital into high-quality assets. Investors should watch for performance divergence in this relatively new segment over the next five years to see if investors stay the course or redeem during negative periods.
Career Advice for Graduates
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(00:58:23)
  • Key Takeaway: Recent graduates must leverage accessible digital information to become highly educated about the industry before entering alternatives or wealth management.
  • Summary: Prospective entrants should be well-educated on the industry before starting, a process significantly easier now than 27 years ago due to information availability. Preparation is key, followed by proactive networking, reaching out, and utilizing relationships to meet people. This combination of knowledge and connection is cited as the best career advice.
Personal Investing Retrospective
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(00:59:02)
  • Key Takeaway: The guest wishes she had applied the current rigor used for client portfolio construction to her own personal alternative investments when starting out.
  • Summary: The evolution in advising clients on alternatives includes developing rigor around sizing and year-over-year portfolio building. Looking back to when she started, the guest admits to lacking this rigor in her personal investing. Specifically, she undersized her allocations and was not diversified enough in her personal alternative investments.
Podcast Wrap-up and Credits
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(00:59:34)
  • Key Takeaway: The episode concludes with acknowledgments for the production team and promotion of the host’s new book, ‘How Not to Invest’.
  • Summary: Host Barry Ritholtz thanks Kristin Olson for her time and reiterates her title as Goldman Sachs Global Head of Alternatives for Wealth. Listeners are directed to find past episodes and the host’s new book, ‘How Not to Invest: The Ideas, Numbers, and Behaviors That Destroy Wealth, and How to Avoid Them’. Production team members, including Alexis Noriega and Anna Luke, are credited.