Allocation to alternative investments in the endowments and pension space has grown tremendously in the last 20 years . Between 1992 and 1995, flow of funds into alternative investments grew by an average of $11 billion per year, amounting to a 92% overall increase in allocation. Still, general commitment to alternatives took up only 5.5% of the overall assets in 1995 . 17 years later, the 2012 NACUBO-Commonfund Study of Endowments reported an average of 54% of assets committed to alternative strategies. This article delves into the motivations that lie behind such an increase in investing in alternatives, as well as a closer look at different types of alternative investments and the risks associated with them.