Money Management understands Natixis Investment Managers (IM) is planning to launch its own private asset product for the Australian retail market.
The €1.3 trillion ($2.3 trillion) asset manager has said it is working closely with its private wealth and advice clients to understand their needs for a retail-friendly private asset offering.
With its private equity manager Flexstone Partners securing approval from the French regulator to launch a retail private equity fund in Europe, Natixis IM said it is hoping to leverage this expertise Down Under.
Speaking to Money Management, Natixis IM’s country head of Australia and New Zealand, Louise Watson, elaborated: “We’re well progressed with the research phase for our private assets offering.
“We’ve had focused, proactive conversations with our wealth management clients to understand what they need and want from a retail-friendly private asset product.”
Nearly half (48 per cent) of wealth managers in Australia said meeting the client demand for unlisted assets will be a “critical factor” in their growth plans, according to Natixis IM research.
Local portfolios are relying on a mix of 88 per cent allocated to public assets and 12 per cent to private assets, however, this spread is set to narrow as the focus on private assets intensifies.
Two-fifths of Australian wealth managers also said a lack of access to private assets represents a threat to their business.
“While private markets have been the talk of the town lately, wealth managers are facing a liquidity challenge,” Watson recognised.
“Few adviser platforms are currently set up to manage less liquid funds and longer valuation cycles, so the technology and supporting platforms must evolve at pace to match the demand for private assets.”
The country head said private market education is equally important for both advisers and their clients, particularly with the valuation and liquidity differences to public markets.
“With a newer asset class, advisers and the end investor must understand the valuation lag and the difference in the return cycle between public and private markets. It’s crucial they understand that these assets aren’t valued daily as with public markets, and adjusting to that timeline expectation is key,” Watson continued.
“Picking the right private markets manager, who can support with education, mitigate risk, and who has a deep track record of delivering value through many market cycles, is a must. Everyone does well when markets are heading up, but how they manage more challenging market conditions is equally, if not more important.”
Fund managers and advisers alike have said they are relying on business development managers (BDMs) more than ever to articulate the benefits and risks of the ever-growing alternative investment market.
Alongside BDMs, investment specialists and portfolio managers are also increasingly becoming more client-facing to support advisers in their understanding of private market funds, such as through educational sessions and events.
