This article is based on a Podcast episode of a same title:
Introduction — Why “Alternatives” Feel So Hard to Understand
The invisible discomfort many people in the investment world carry
In the world of investing, there seems to be an invisible wall.
On one side, we have “traditional assets” — listed equities and bonds that anyone can access.
On the other, we have areas like PE and VC, often perceived as something only a small group of people deal with.
Even though both belong to the same word investment, many people treat the former as the mainstream, and the latter as something distant, niche, or even opaque.
When they face “alternatives”, they often don’t know where to begin.
What is different?
Where is the boundary?
Why does it feel like a completely separate world?
And most importantly:
Where am I standing on this map?
The difficulty doesn’t come from lack of knowledge — it comes from not seeing the structure
This confusion does not arise because people lack technical expertise.
It arises because they cannot see the structure —
the overall map of how the world is organized.
In this article, based on the discussion in Podcast Episode 6, we will redraw the spectrum of investment strategies, view traditional and alternative assets as a single continuous map, and explore how understanding this structure helps you define your own positioning.
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Diagram 1 — Drawing the Overall Map of Asset Classes
Traditional and alternative assets are not separated by a hard boundary
When people try to understand the investment universe, they often categorize “traditional” and “alternative” as if they were two separate worlds.
Listed equities and bonds are seen as the “surface world”.
PE, VC, real estate, and private debt are seen as the “underground world”.
It feels as if there is a clear dividing line.
Liquidity × Information homogeneity turns the world into a single map
But in reality, the two worlds are not disconnected. When we organize the universe using two axes —
liquidity and information homogeneity —
traditional and alternative assets form a continuous spectrum, a single map.
A continuous path from shallow to deep
In the upper-left corner lies the transparent, accessible world.
In the lower-right lies the deep, opaque world.
Between them is a wide “middle zone”.
In other words:
The investment world is not divided into “surface and underground”, but is a continuous path from shallow to deep.
Once you see this map, you begin to understand where you stand — and where you might want to go.
Diagram 2 — The Two Axes That Define Depth
Liquidity — how freely you can enter and exit
The essence of how the investment world is divided is surprisingly simple.
One axis is liquidity — how freely you can buy, sell, and move capital.
Information asymmetry — who knows what
The other axis is information asymmetry — who knows what, and how unevenly information is distributed.
Why structure itself creates premium
In a world where information is uniform and liquidity is high, returns converge toward the market.
This is why “active managers can’t beat the index” becomes a common refrain, and why large portfolios naturally anchor themselves to market indices.
On the other hand, in a world where information is uneven and liquidity is limited, structure itself creates premium.
Small caps, active strategies, hedge funds — they all rely on information gaps and limited liquidity.
PE, VC, private real estate, and private debt sit even deeper, where both liquidity and information are constrained.
Depth connects directly to corporate growth stages
Once you understand this structure, you begin to see why alternatives are “deep”. And this depth connects directly to the growth stages of companies and the strategies and support required at each stage.
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Diagram 3 — How Companies and Funds Grow Together
0 → 1 → 10 → 100 — the growth story of a company
Companies grow — ideally — from 0 to 1, then 10, then 100. As they grow, the capital they need and the support they require change.
Different stages require different capital and support
This is why funds have different roles depending on the stage.
VC, Growth, Buyout —
each plays a distinct part.
A relay from VC → Growth → Buyout
Ideally, companies and funds pass the baton like a relay, each supporting the company at the stage where they add the most value.
IPO is not the goal — it is just one option
At the end of this relay lies the option of going public.
But IPO is not the goal.
It is simply one of several possible paths.
Some companies choose buyout instead.
Some go public and later go private again. This is increasingly common in both Japan and the US.
Why understanding stages and strategy matters
What matters is understanding:
What structure exists at each stage, and what strategy and support are required.
The three diagrams above serve as a map for reading this structure.
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Conclusion — Understanding Structure Is the First Step Toward Positioning
The world is not divided — it is one continuous map
Liquidity, information asymmetry, growth stages.
When we re-examine the world through these three axes, traditional and alternative assets emerge not as separate worlds, but as a single continuous map.
Structure changes perspective — and perspective defines positioning
With this map, both investors and founders can see, where they stand and where they should go next.
The three axes that connect traditional and alternative worlds
And the first step begins when we stop seeing traditional and alternative assets as two disconnected worlds, and instead recognize them as one continuous landscape.
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