Article Q3 Alternative Opportunities report

11 September 2026
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While fundamentals across private markets remain generally resilient, tightening credit spreads and elevated valuations in some growth-oriented segments have tempered our outlook. We remain neutral across most private market exposures, while continuing to favour real assets and hedged strategies. Our experts highlight opportunities in alternative credit, selective private equity segments, income-oriented real assets, and hedge fund strategies that may benefit from elevated rates and market volatility. (Read the complete Alternative opportunities Q3 insights)

Private credit: Neutral as credit spreads tighten

We’ve reduced our modest overweight in private credit to neutral as spreads have tightened across much of the market. Despite this, private credit remains an important funding source for businesses and real assets and continues to offer potential illiquidity and complexity premiums. Alternative credit, particularly venture debt, is our favoured strategy within the asset class.

Q3 private credit summary

Asset class

Overall

Valuations

Fundamentals

Secular trend

Direct lending

Neutral

Neutral

Neutral

Attractive

Real asset credit

Neutral

Neutral

Neutral

Attractive

Alternative credit

Neutral

Neutral

Neutral

Attractive

Source: Invesco, Alternative Opportunities – Q3 outlook, pg. 5

Private equity (PE): Underweight due to moderating valuations 

We’ve upgraded private equity to neutral as free cash flow yields have improved relative to public equities and financing spreads remain supportive. We continue to favour growth and venture strategies, particularly early-stage opportunities where valuations appear more attractive. We also see continued interest in secondaries, although discounts have moderated from prior levels.

Q3 private equity summary

Asset class

Overall

Valuations

Fundamentals

Secular trend

Private equity

Neutral

Neutral

Neutral

Neutral

Invesco, Alternative Opportunities – Q3 outlook, pg. 14

Real assets: Slight overweight as valuations approach trough, start to appear attractive in real estate equity

We remain slightly overweight real assets, including both real estate and infrastructure. In real estate, we favour defensive, income-oriented sectors and see opportunities driven by selective valuation dislocations. Infrastructure continues to benefit from strong fundamentals and long-term secular themes, particularly across digital infrastructure, power generation, and energy-related investments.

Q3 real assets summary

Asset class

Overall

Valuations

Fundamentals

Secular trend

Real estate

Overweight

Attractive

Neutral

Neutral

Infrastructure

Overweight

Unattractive

Attractive

Attractive

Invesco, Alternative Opportunities – Q3 outlook, pg. 23

Hedge funds: Overweight due to current levels of arbitrage spreads 

We continue to view hedge funds favourably, particularly strategies with lower sensitivity to broader market movements. Elevated interest rates, attractive arbitrage spreads, and the potential for continued market volatility support our outlook. We still view hedge funds as attractive, but we may moderate that when capital markets reopen and outlook for stock markets improves.

Q3 hedge funds summary

Asset Class

Overall

Valuations

Fundamentals

Secular trend

Event-driven and arbitrage

Overweight

Neutral

Neutral

Attractive

Systematic trend

Overweight

Neutral

Neutral

Attractive

Invesco, Alternative Opportunities – Q3 outlook, pg. 31

Read the complete Q3 Alternative Opportunities report.

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  • Investment risks

    The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.

    Alternative investment products may involve a higher degree of risk, may engage in leveraging and other speculative investment practices  that may increase the risk of investment loss, can be highly illiquid, may not be required to provide periodic pricing or valuation information to investors, may involve complex tax structures and delays in distributing important tax information, are not subject to the same regulatory requirements as mutual portfolios, often charge higher fees which may offset any trading profits, and in many cases the underlying investments are not transparent and are known only to the investment manager. There is often no secondary market for private equity interests, and none is expected to develop. There may be restrictions on transferring interests in such investments. 

    Important information

    All data is provided in USD and as of 28 July 2026 sourced from Invesco unless otherwise stated.

    This is marketing material and not financial advice. It is not intended as a recommendation to buy or sell any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication.

    Views and opinions are based on current market conditions and are subject to change.