The alts space is growing. McKinsey calculates that alternatives make up 12% of the global industry assets and produced about a third of revenues in 2013. The firm projects alts will make up 15% of the industry and produce 40% of revenues by 2020.

“The broader asset-management industry has been stuck in the old world of traditional asset return products,” Kwek added. “Those are folks who are going to be squeezed” by alternative investments.

The ETF space is also catering the growing demand. The recently launched actively managed PowerShares Multi-Strategy Alternative Portfolio (NasdaqGM: LALT) is designed to mute portfolio volatility while boosting risk-adjusted returns. [A Liquid Alts ETF Idea for the Second Half]

For more information on investing with ETFs, visit our ETF 101 category.

Max Chen contributed to this article.