Wilshire’s 2026 Outlook and the Case for Selectivity, Resilience, and Forward-Looking Portfolio Construction
Wilshire opens its 2026 Alternatives Outlook with a clear philosophical anchor: economic fundamentals matter. Whether capital is allocated to “credit or equities, currencies or commodities, real estate or infrastructure,” Wilshire emphasizes that “the macroeconomic context ultimately influences performance.” This conviction underpins the firm’s long-standing thesis-driven approach, where macro views do not replace bottom-up research but instead “serve as a guide when allocating scarce resources to find and evaluate the most compelling investment strategies.”
That framing sets the tone for a report defined not by predictions, but by navigation—through uncertainty, fragmentation, and structural change.
A Global Backdrop Defined by Uncertainty—and Opportunity
Wilshire characterizes 2026 as a world “seemingly in transition,” shaped by the interaction of policy, geopolitics, technology, and sustainability. In this environment, diversification—one of the core utilities of alternatives—has moved back to the forefront.
Four global megatrends dominate Wilshire’s outlook:
- Artificial intelligence
- Geopolitics
- Macroeconomic uncertainty
- Energy transition and sustainability
These forces are “driving both disruption and opportunity—reshaping how capital is deployed, where value is created, and what risks must be managed.” Success, Wilshire argues, will depend on “selectivity, resilience, and a forward-looking approach to portfolio construction.”
AI, in particular, stands out as both catalyst and constraint. Wilshire describes it as “a powerful productivity enhancer and disruptor of business models,” driving “massive capital investment in data centers, digital infrastructure, and energy,” while simultaneously raising the bar for manager capability. The ability to implement AI-driven operational improvements is now “an important differentiator.”
North America: Structural Transformation Beneath Cyclical Moderation
Wilshire frames the U.S. outlook as one of “moderate, yet resilient growth amid an unusually wide range of potential outcomes.” Inflation is expected to “gradually subside,” allowing the Federal Reserve to pursue a “measured easing cycle,” though one likely to be shallow given persistent inflation risks and a divided FOMC.
The U.S. economy exhibits a pronounced K-shaped dynamic, where “wealth effects from equity market gains support high-end consumption while middle- and lower-income cohorts remain constrained.” Business investment, by contrast, remains robust, driven by AI infrastructure, with data centers now accounting for a “significant share of GDP.”
Policy risk looms large. Wilshire notes that the U.S. faces “its highest effective tariff rate since the 1930s,” alongside uncertainty tied to fiscal legislation and potential changes in Fed leadership.
Private Markets in North America
Across private markets, Wilshire describes an environment of selective optimism:
- Private equity buyouts are expected to benefit from lower rates, with Wilshire favoring “smaller and sector-focused managers” capable of operational value creation and complexity, including carve-outs and special situations.
- Growth equity remains favored for accessing secular themes, particularly as AI shifts from pilot projects to “enterprise-scale deployment,” though investors are increasingly selective.
- Venture capital continues to be dominated by AI-related companies, while non-AI firms with weaker earnings remain under pressure.
In private real assets, infrastructure stands out as a leading opportunity. Wilshire highlights AI-driven power demand and energy transition as central catalysts, noting that private capital is “increasingly stepping in to fill gaps left by constrained public funding.”
Private Credit: Discipline Over Reach
While direct lending opportunities remain robust due to bank retrenchment, Wilshire warns that surging inflows have compressed spreads and weakened protections. The report stresses that recent bankruptcies reinforce the need for “realistic forecasting, meaningful covenants and rightsized debt packages.” Opportunistic and alternative yield strategies, particularly those targeting inefficiencies and contractual cash flows, are highlighted as offering “all weather” attributes.
Europe: Defensive Transformation in a Fragmented Landscape
Europe enters 2026 with stabilized growth but persistent fragmentation. Wilshire notes that inflation has moved closer to target, enabling cautious rate cuts, while geopolitical pressures—from Ukraine to EU-U.S. trade realignments—continue to shape investment conditions.
A defining development is the Draghi Competitiveness Plan, mobilizing capital toward digital innovation, green transition, and European sovereignty. Complementing this is a €750 billion EU sovereign wealth initiative aimed at catalyzing co-investment in digital and clean infrastructure.
Wilshire expresses conviction in “defensive-yet-transformative business models with strong embedded demand and SaaS or recurring revenue profiles,” particularly where digital and AI technologies enhance productivity in traditional sectors.
European Private Markets
- Buyouts benefit from fiscal stimulus tied to defense and infrastructure, though liquidity constraints persist and fundraising has been challenging.
- Growth equity has shifted away from “growth at all costs,” with investors prioritizing profitability and operational value creation.
- Venture capital remains heavily skewed toward AI, accounting for nearly 40% of deal value, while exit markets remain muted.
In real assets, Wilshire highlights Europe’s leadership in energy transition infrastructure, supported by ambitious net-zero targets and public-private partnerships, while acknowledging challenges from high development costs and regulatory constraints.
In private credit, Europe now accounts for roughly one-third of the global market. Wilshire favors niche and mid-market lending, where managers can earn a “solution premium,” and underscores that regulatory-driven bank deleveraging has created a “permanent” pipeline of distressed and special situations opportunities.
Asia-Pacific: Structural Growth and Regional Rebalancing
Wilshire describes Asia-Pacific as entering 2026 with “strong macroeconomic fundamentals,” muted inflation, and renewed global investor interest following years of under-allocation. While U.S. tariffs remain a concern, intra-regional trade and domestic demand provide important offsets.
China features prominently. Despite ongoing challenges in real estate and local government debt, Wilshire emphasizes that China’s expected 5% GDP growth remains “a significant absolute figure,” supported by calibrated stimulus and a continued focus on tech-driven productivity and advanced manufacturing.
Japan stands out for buyouts and real estate due to structural reforms, favorable financing conditions, and currency dynamics. India and Southeast Asia benefit from demographic tailwinds, consumption growth, and supply-chain diversification, though selectivity remains essential.
Across Asia-Pacific private markets:
- Mid-market buyouts are favored for valuation and value-creation potential.
- Growth equity deployment is accelerating as exit conditions improve in India and Hong Kong.
- Venture capital is described as “tentative bottoming rather than a full turn,” with Wilshire maintaining a contrarian but “data-driven” constructive view on China VC, particularly in EVs, robotics, and applied AI.
Marketable Alternatives: Dispersion Is the Opportunity
Wilshire’s outlook for marketable alternatives is anchored in dispersion, volatility, and policy divergence. Despite global equity rallies, the firm maintains a “cautious view regarding directional equity and credit strategies,” favoring instead relative-value, market-neutral, and actively traded approaches.
The report highlights:
- Continued opportunity in equity hedge strategies, especially lower-beta and market-neutral implementations.
- Favorable conditions for long-short credit and structured credit, while remaining cautious on distressed strategies due to limited defaults.
- A renewed tailwind for event-driven strategies, supported by wider merger spreads and improving regulatory clarity.
- Strong conviction in relative-value strategies, including fixed income, convertible arbitrage, and volatility trading, particularly as retail participation reshapes market microstructure.
Wilshire concludes that multi-strategy platforms capable of dynamically allocating across these opportunities are well positioned in an environment of “still higher rates, dispersion, and uncertainty.”
Key Takeaways for Advisors and Investors
- Uncertainty is not a bug—it is the opportunity set. Wilshire’s 2026 outlook consistently frames volatility, dispersion, and fragmentation as fertile ground for skilled alternative managers.
- Selectivity matters more than allocation size. Across regions and strategies, Wilshire emphasizes manager quality, specialization, and operational capability.
- AI reshapes everything—but unevenly. From private equity to infrastructure to marketable alternatives, AI is both a growth engine and a source of valuation and execution risk.
- Private credit demands discipline. Compressed spreads and competition heighten the importance of covenants, underwriting, and niche positioning.
- Diversification is regaining its relevance. Alternatives’ ability to deliver uncorrelated returns and contractual cash flows is once again central to portfolio construction.
In Wilshire’s words, navigating 2026 will require “selectivity, resilience, and a forward-looking approach.” For advisors and investors, the message is clear: alternatives are no longer optional complements—they are essential tools for building durable portfolios in a world defined by transition.
Footnote:
1 Wilshire Advisors LLC. Alternatives 2026 Outlook. Wilshire Advisors LLC, Jan. 2026,
