More than half of financial advisers and wealth managers are currently investing in private markets, with a further 20% expecting to do so during the next two years, according to Schroders’ flagship Global Investor Insights Survey (GIIS)
GIIS, which encompasses 1,755 global wealth managers and financial advisers representing $12.1trn in assets, including 525 from Asia Pacific, shows that those in Asia Pacific expect their clients will increase their allocations to private equity (51%), multi-private asset solutions (50%) and renewable infrastructure equity (48%) over the next 1-2 years.
Szu Yi Chin, head of wealth and product, Asia Pacific, Schroders, said: “Over half of wealth managers and financial advisers in Asia Pacific currently invest in private markets for their clients.”
On average, most investor allocations to private markets are either 5%-10% or 1%-5% of portfolio exposures.
Almost two-thirds (64%) of wealth manager and financial adviser respondents in Asia Pacific highlight that the potential for higher returns than public markets is the most important benefit of investing in private markets for their clients. This was closely followed by achieving diversification through differentiated drivers of return (60%).
Additionally, wealth transfer was stated as a priority for 57% of wealth managers and advisers in Asia Pacific. In comparison, 66% in North America consider wealth transfer to be very important, while those in the UK (57%) and EMEA (58%) are similar to this region.
“However, they face significant challenges, with 46% citing clients’ limited understanding of private markets, 41% concerned about potential liquidity issues, and 34% highlighting transparency concerns. This gap presents a meaningful opportunity to deepen client engagement with private markets,” said Chin.
More than half (56%) of wealth managers and advisers in Asia Pacific surveyed said they were accessing private markets opportunities via semi-liquid/open-ended evergreen funds, followed by listed funds (54%) and closed-ended funds (52%).
David Bajada, investment director, private equity, Schroders Capital, said:”There is no doubt that investors in Asia Pacific believe that private assets will play a very significant role in their portfolios going forward. A majority of wealth managers and financial advisers in Asia Pacific (71%) are already personally involved or will be involved in the private market allocation or product selection process within their
organisation, which may also reflect the desire that their clients have in allocating more of their assets to this asset class.”
“The key for them is to further explore and utilise the emergence of new vehicles, such as semi-liquid funds, that will broaden access and offer flexibility for investors to meet their investment objectives in private markets. It is therefore unsurprising to see these structures are being favoured by this client segment,” he added.
The research was carried out by CoreData Research via an extensive global survey during June-July 2024. The 525 APAC wealth respondents were split as follows: 80 each from Australia, Japan, China, Hong Kong, Singapore, South Korea and 45 from Taiwan.
