Before beginning their finance career, many new grads tend to see financial work through the lens of public markets. They see the stock market, they have a good sense of how public companies report findings to the SEC, and they know how valuation models work to price future growth into equities.

However, this bias is not representative of the size of the actual financial industry.

Public equity markets are important, but they’re a small percentage of the total financial market, both in terms of asset size and in terms of jobs. Most starting analysts, when working in investment banking, find themselves often working on small private equity deals or other kinds of private transactions that are far removed from the world of common stock trading. Others will find themselves working in risk assessment and derivative construction that involve very different math and perspectives than common stocks.

In reality, you might end up working in the large and growing world of “alternative assets”. The most well-known is hedge funds, whose job is to find uncorrelated returns by going long and short assets to have returns that will not go down in bear markets. In doing so, their risk-adjusted returns (alpha) should be above the returns of the S&P 500.

Another important alternative asset class is private equity, which is a big umbrella that encompasses many strategies. There’s the leveraged buyout (LBOs), which are the most common time of PE fund. These funds purchase private equities by using debts such as high-yield bonds, mezzanine financing, and other kinds of complex debt instruments to leverage the buying power of their assets under management. These funds then use their assets and cash from financing activities to buy private companies. Because of the leverage and knowledge asymmetry in private markets, returns here can be very high. Risks can also be high for the same reasons.

Similar to LBOs are venture capital, which tend to use a mix of assets and cash raised from debt to invest in a variety of early-stage companies or startups at various levels. VCs do their investments in “rounds” and tend to invest alongside other VCs to spread risk. VCs also tend to shoot for having one very big winner that offsets many small losses. A good VC will have one investment appreciate by 1000% or more, even if several others don’t appreciate at all or end up losing all of the invested capital.

Another big alternative asset group is real estate. We all know about individuals buying their own home and living in it, but real estate companies will often specialize in a sector of real estate and scale this concept to massive proportions. Blackstone became an infamous “landlord” when they bought billions worth of single-family residences at the bottom of the real estate crash in 2009. Blackstone needed to hire a legion of analysts to manage these purchases and make them work for the firm. That was not a smooth transition, with some public embarrassments and upsets along the way.

Nowadays, a lot of alternative real estate investment is done through REITs, or real estate investment trusts. These companies will hire young analysts to do the kind of financial modeling and valuation that you’d expect for equities, except they do it on real estate. An understanding of property, cash flows, and occupancy rates is particularly valuable in this niche.

Finally, there are commodities. Nowadays this is one of the tougher parts of the alternative asset world in large part to a collapse in oil prices, weakness in most energy costs, a weak or negative PPI growth rate, and lackluster returns in gold due to low inflation levels around the world. As you can probably already tell, commodity investors tend to rely on macroeconomic and technical analysis to provide returns—financial modeling in the conventional sense is often irrelevant, and sometimes merely tangential.