The growing demand for alternative investment strategies among financial advisers and their clients continues at a rapid pace. Many investors are realizing that their retirement income might not be as strong as originally anticipated. And many advisers are realizing that the traditional portfolio allocation of stocks and bonds will not deliver the retirement security that their clients deserve.

Nontraded business development companies (BDCs) are an emerging asset class that could be part of the solution.

Several diverging trends are driving the demand for income-oriented alternative investment products. Approximately 77 million Americans born between 1946 and 1964 are entering retirement at a historic pace, and many are worried about outliving their savings. Additionally, the decline in pension plans means that most of these retirees will be depending on defined contribution plans to provide for their retirement.

The combination of these factors, a