A desire to buy innovative products and the prospect of high returns are key reasons high net worth people invest in alternatives. Where should you start?

If rich people are buying an asset class, it is only a matter of time before the rest of us will be looking at it too.

So if 22 per cent of Australia’s high net worth individuals already hold it and 85 per cent of the rich people who have already bought into it are looking at putting more in, that’s an asset that rightly deserves attention.

In this case, though, it’s an asset class that is so broad that it is often defined by what it isn’t rather than what it is. We are talking about alternatives.

So what exactly are they? And, more importantly, how do you invest in them?

“The industry considers alternatives to be anything, really, that doesn’t fit into a traditional bucket,” says Gareth Croy, managing director and founder of Your Future Strategy wealth management company.

“So if it’s not equities, it’s not bonds, it’s not property, it’s not credit, then it’s an alternative, is generally how the industry approaches it.”

That includes investments in commodities, infrastructure, hedge funds, collectables, venture capital, private equity, derivatives and structured products.

That’s the investment universe that CoreData and Praemium used in some recent research that gets under the hood of the alternatives motor.