Demand for private markets assets from institutional investors is well-known to have increased. But which of these assets is most in demand, and which type of asset manager is likely to get the business?
Our recently published research into product trends offers some insight.
Respondents – there were 172 in total - to a survey carried out by Funds Europe in partnership with Caceis mostly felt real estate would offer the most attractive opportunities for growth in the coming 12 months. (Results were mean-weighted; see link below for charts).
Private credit ranked second followed by private equity and infrastructure.
At least two types of asset managers exist in the growing private assets sector: the specialists, with a tight focus on the illiquid assets that comprise these investments; and ‘traditional’ asset managers, who have entered the area in more recent years and have usually much larger ‘vanilla’ funds businesses invested in highly liquid securities on public markets.
Our survey asked respondents which of the two types of managers would be favoured as a route to market. Specialist investment boutiques were cited by 37% of respondents. This was more than double the percentage of those who felt large asset management houses would be the primary source of expertise.
Some 13% of respondents said that specialist fund managers may over time look to new issuance models, particularly tokenised issuance of fund units on blockchain (13%). This could improve liquidity, potentially making illiquid assets available to a wider range of investors, such as smaller defined contribution schemes, and perhaps even retail investors.
However, the overarching message from these survey results is that there is a position for both specialist boutiques and larger asset management houses in supporting investors’ appetite for private market products.
Offering access will become increasingly important to asset managers. One projection – from PWC – is that assets under management (AuM) in private market strategies are likely to grow between US$4.2 trillion and $5.5 trillion in the period to 2025, boosting aggregate AuM in the sector to as much as $15 trillion. PwC’s base-case scenarios is that private assets will represent more than 10% of global AuM by 2025.
*Read more and see the charts here.
To start reading the full ‘Product Distribution and Governance Report’, see here:
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