Demand for alternative assets not being met
There has never been stronger appetite globally for alternative assets but the market has not served institutional investors’ rising demands, according to alternative asset management firm Morrison and Co.
Nicole Walker, Morrison and Co chief commercial officer, said the demand for private equity, private credit infrastructure and real estate was growing 10% a year.
“Every institutional investor, every sovereign wealth fund I speak to, would like to increase their exposure to Asian infrastructure, private equity, etc, and they can’t find enough credible managers to invest with compared to the plethora that they see in Europe, Australia and the US,” she said.
According to Walker, North America held about 50% of these products, with more and more interest coming from Europe and Asia.
She said private equity had always dominated this space but popularity in infrastructure and private credit were “really coming into their own”.
“They've always been quite well understood, particularly infrastructure in Australia as superannuation funds cannot invest enough in infrastructure, locally and globally,” she said.
But outside of Australia, the rate of investment in infrastructure from institutional investors, particularly from private credit, was picking up.
And according to Walker, this was resulting in new inflows of money into Australia which was contributing to the mega-privatisation trend happening here.
“And that's partly because all of these investors globally are growing at such a significant rate that they need to put away significant amounts of equity,” Walker said.
“They're writing 500 $1 billion checks comfortably, and there just isn't the supply of assets that they can invest in, so that's why you're seeing massive oversubscription to these sorts of deals.”
AUTHOR
Liam Cormican
Recommended for you
Women are expected to inherit US$124 trillion through the intergenerational wealth transfer, but Capital Group has found they are twice as likely to rely on social media for advice over a financial adviser.
Challenger Investment Management has raised $350 million during the offer period for its new ASX-listed investment structure.
A week after Lonsec downgraded multiple funds from Metrics Credit Partners, rival research house Zenith Investment Partners has opted to retain its ratings for the same funds.
Strong adviser engagement has helped Praemium reach $1 billion in inflows on its Spectrum offering, with a deal with Western Australian wealth firm Euroz Hartleys expected to add as much as $2 billion.
