In Episode 8 of our Alternative Investment Reality Check series, Atlas Capital Advisors CIO Ken Frier tackles the risk illusion—the false belief that alternative investments carry low risk and have a low correlation to public markets.

Ken breaks down how reporting practices mask the underlying volatility, using examples from private real estate, private equity, and direct lending.

You’ll see how actual market-traded values reveal higher risk and stronger correlations than most investors realize—and why industry professionals rarely challenge this perception.

Key points covered:

• Misleading statements about the volatility and correlation of alternatives are common.
• Case studies include:
  • REITs vs. private real estate
  • Trading price vs. manager-reported value of London-listed private equity funds
  • BDCs vs. private credit
• Selective loss recognition distorts the risk picture.
• Many investment professionals have a stake in the “low volatility and correlation” narrative—even if they don’t truly believe it.
• The real risk and correlation data investors should use in portfolio decisions.

Now that alternative investments are becoming an option in 401(k) plans, it’s important that the general public has clear, unbiased information. If you’re considering adding alternatives, make sure you have the facts first.