Half of financial advisers and wealth managers in Asia-Pacific plan to increase their clients’ exposure to private equity and multiprivate asset solutions, according to a survey by Schroders.
Schroders’ Global Investor Insights Survey surveyed over 2,800 respondents globally, including 795 in Asia-Pacific (159 in Australia).
Over half (55 per cent) of financial advisers globally said they are already investing in private assets and a further 19 per cent said they plan to do so in the next one or two years.
Looking at specific areas favoured by Asia-Pacific advisers, around half (51 per cent) of financial advisers and wealth managers expect to increase their clients’ allocation to private equity, while 50 per cent expect to increase allocations to multiprivate asset solutions.
Private equity is the asset class where all participants across all geographic regions surveyed are most keen to increase their exposure.
On the fixed income side, 40 per cent expect to increase allocations to private debt and 40 per cent expect to see their exposure to infrastructure debt rise over the next 12 months.
When it comes to how they access their assets, 74 per cent of advisers said active managers are better for specialist funds, but 77 per cent noted they “keep a careful eye” on active management costs to ensure they deliver value for clients.
Georg Wunderlin, global head of private assets at Schroders, said: “Private assets are valued as a source of diversification. Following shifts in the rate environment, private markets investments are at a pivotal moment.
“Investors are recognising the potential of private assets to drive positive change and, therefore, higher returns.
“What is required in the future is even deeper skills of managers to source, manage and execute private assets. Consequently, investors must be increasingly selective and partner with managers that possess the ability to control value creation.”
Meanwhile, research by Praemium and Investment Trends found 32,000 high-net-worth investors are expected to invest in private markets over the next year, driven by the ability to source unique opportunities not found in public markets.
Key drivers of interest in private markets include the potential for higher returns and diversification benefits – 73 per cent of HNW investors are drawn to private markets for the opportunity to achieve higher returns, while 55 per cent seek to diversify their portfolios.
“Advisers can play a crucial role in helping investors navigate private markets. By leveraging their networks with private equity firms and venture capitalists and partnering with investment platforms, advisers can provide clients with exclusive access to investment opportunities that are not available to the general public,” Praemium said.
It also highlighted that those who are already investing in private markets rely the most on their adviser for information and are more likely to base their decisions on adviser recommendations than those who are considering investing or not investing at all.
