Why Family Offices and SDIRA Investors Are Embracing Alternative Investments

Over the past several years, there has been a clear shift in how investors think about building portfolios, protecting against inflation, and preserving long-term wealth. A recent CNBC report highlights this trend among family offices, many of which are significantly increasing their exposure to alternative investments, particularly real estate and other assets designed to hold up in inflationary environments.

What makes this shift especially interesting is that it is not limited to ultra-wealthy families. The same behavior is showing up among middle-class investors using Self-Directed IRAs (SDIRAs). These investors are increasingly allocating retirement assets to real estate, precious metals, and Bitcoin, following many of the same principles long used by sophisticated family offices.

This overlap points to an important reality. Alternative investing is no longer reserved for institutions or billionaires. Through a Self-Directed IRA, everyday investors can access the same asset classes, and many of the same benefits, that family offices rely on to protect and grow wealth over time.

This article breaks down the key takeaways from CNBC’s findings, explains the rise of alternative investments, examines the growing role of Self-Directed IRAs, and explores why these trends are accelerating across both institutional and retirement investing.

1. CNBC Summary: Family Offices Increase Allocations to Alternative Investments

According to CNBC’s analysis, family offices are actively shifting capital away from traditional public markets and toward alternative investments. Inflation concerns and heightened market volatility are major drivers of this change. Family offices, which manage wealth for high-net-worth families, are increasingly focused on assets that can generate income while preserving long-term value.

Real estate has emerged as a central pillar of this strategy. Both commercial and residential properties offer tangible value, recurring rental income, and the ability to adjust pricing over time. These characteristics make real estate a particularly effective hedge against inflation.

CNBC also notes that family offices are allocating meaningful portions of their portfolios to private equity, private credit, infrastructure, and other non-public investments. This marks a clear departure from the traditional 60/40 stock-bond model and reflects growing skepticism that public markets alone can deliver consistent real returns in today’s economic climate.

Importantly, this move is not speculative. Family offices typically invest with long time horizons and emphasize capital preservation alongside growth. Their increased reliance on alternative investments signals confidence that these assets are essential to long-term portfolio resilience.

2. The Power of Alternative Investments and Their Rapid Emergence

What Are Alternative Investments?

Alternative investments include asset classes that fall outside traditional publicly traded stocks, bonds, and mutual funds. Common examples include:

• Real estate
• Private equity and venture capital
• Private lending and private credit
• Precious metals
• Commodities
• Infrastructure
• Hedge funds
• Cryptocurrencies such as Bitcoin

These assets often share common traits such as lower correlation to public markets, longer holding periods, income-generating potential, and built-in inflation protection.

Why Alternatives Have Grown So Quickly

Over the past decade, alternative investments have moved from the margins to the mainstream for several reasons.

First, persistently low interest rates reduced the appeal of traditional fixed-income investments, pushing investors to search for yield elsewhere. Second, rising inflation renewed interest in tangible and scarce assets like real estate and commodities. Third, technological and regulatory advancements have made private markets more accessible to a broader range of investors.

Research from private-market data firms shows that family offices now routinely allocate 30 percent to 50 percent or more of their total assets to alternatives. Platforms focused on private credit, real estate syndications, and private equity have facilitated tens of billions of dollars in alternative investment activity in recent years.

This growth reflects a broader understanding that alternative investments are not just about boosting returns. They also play a critical role in stabilizing portfolios and reducing dependence on public market performance.

3. The Same Trend Is Happening in Retirement Accounts

IRA Financial’s Experience with Self-Directed IRA Investors

While CNBC’s report focuses on family offices, IRA Financial has observed remarkably similar behavior among Self-Directed IRA investors. This is especially true among middle-class savers who want more control over how their retirement capital is invested.

Across tens of thousands of accounts, IRA Financial has consistently seen increased allocations to:

• Self-Directed IRA real estate investments
• Gold and precious metals IRAs
• Bitcoin and other cryptocurrencies held inside retirement accounts

This shift reflects a growing awareness that retirement portfolios do not have to be confined to traditional Wall Street products. Investors are choosing assets they understand, trust, and view as long-term stores of value.

Real Estate as the Cornerstone Asset

Real estate is the most common alternative asset held in Self-Directed IRAs. Investors are using SDIRAs to purchase rental properties, multifamily projects, commercial buildings, and real estate syndications.

The appeal is straightforward. Real estate generates income, benefits from leverage, and has historically performed well during inflationary periods. When held inside a Self-Directed IRA, rental income and appreciation can compound without annual taxation, which can significantly enhance long-term returns.

Precious Metals and Bitcoin

Precious metals continue to play a core role for many SDIRA investors seeking protection against currency debasement. Gold and silver have long histories as stores of value and are commonly used to diversify retirement portfolios.

Bitcoin has also become a popular SDIRA investment. Many investors view Bitcoin as digital gold, a scarce and decentralized asset that can hedge against monetary inflation. Holding Bitcoin inside a Self-Directed IRA eliminates capital gains taxes on trading activity, making it especially attractive for long-term investors.

4. What Is a Self-Directed IRA (SDIRA)?

A Self-Directed IRA is a retirement account that follows the same tax rules as a traditional or Roth IRA but allows for a much wider range of investment options.

Unlike standard brokerage IRAs that typically limit investors to stocks, ETFs, and mutual funds, a Self-Directed IRA can hold:

• Real estate
• Private businesses
• Private equity and venture capital
• Private lending and promissory notes
• Precious metals
• Cryptocurrencies
• Tax liens and other alternative assets

The account is administered by a specialized custodian, such as IRA Financial, which ensures compliance with IRS rules while allowing the investor to retain full control over investment decisions.

How a Self-Directed IRA Works

An investor opens a Self-Directed IRA, funds it through contributions or rollovers, and then directs the IRA to invest in permitted assets. All income and gains flow back into the IRA, and all investment-related expenses must be paid directly from the IRA.

As long as prohibited transaction rules are followed, the SDIRA offers a highly flexible and powerful structure for retirement investing.

5. Tax Advantages of a Self-Directed IRA

One of the most compelling reasons investors use Self-Directed IRAs for alternative investments is tax efficiency.

Tax-Deferred Growth

In a traditional Self-Directed IRA, rental income, interest, and capital gains grow tax-deferred until distributions are taken in retirement.

Tax-Free Growth with a Roth SDIRA

With a Roth Self-Directed IRA, qualified gains, including appreciation from real estate and Bitcoin, can be entirely tax-free.

No Capital Gains Taxes on Asset Sales

Selling a property or cryptocurrency inside an SDIRA does not trigger capital gains taxes. This allows investors to reinvest proceeds and compound returns more efficiently over time.

6. Why Buying Alternative Investments with a Self-Directed IRA Is So Powerful

Holding alternative investments inside a Self-Directed IRA combines institutional-style investing with retirement-level tax advantages.

Key benefits include:

• Greater diversification away from public markets
• Inflation protection through real assets
• Tax-efficient income generation
• Long-term compounding without annual tax drag

This structure allows everyday investors to apply the same core strategies used by family offices, just on a smaller scale and within a regulated retirement framework.

7. Conclusion: Family Offices and SDIRA Investors Are Reaching the Same Conclusion

The CNBC report makes it clear that family offices now view alternative investments as a core component of portfolio strategy, not a fringe allocation. At the same time, IRA Financial’s experience shows that Self-Directed IRA investors are independently reaching the same conclusion.

Both groups are responding to the same challenges: inflation risk, public market volatility, and the need for diversification beyond traditional stocks and bonds.

Through a Self-Directed IRA, middle-class investors can access real estate, precious metals, and Bitcoin with the same long-term mindset as family offices, while benefiting from powerful tax advantages that taxable accounts simply cannot offer.

As alternative investments continue to move into the mainstream, the Self-Directed IRA stands out as one of the most effective tools for participating in this shift. It allows investors to build retirement portfolios that reflect modern economic realities while staying grounded in timeless wealth-building principles.