Wealth managers and financial advisers in Asia Pacific dial-up private markets allocations in response to shifting market dynamics
More than half of advisers and wealth managers are currently investing in private markets, with a further 20% expecting to do so in the next two years, Schroders’ flagship Global Investor Insights Survey (GIIS) has found.
More than half of advisers and wealth managers are currently investing in private markets, with a further 20% expecting to do so in the next two years, Schroders’ flagship Global Investor Insights Survey (GIIS) has found.
GIIS, which encompasses 1,755 global wealth managers and financial advisers representing US$12.1 trillion in assets, including 525 from Asia Pacific, reveals that those in Asia Pacific anticipate 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.
On average, how do you anticipate your clients’ allocation to the following private markets asset classes changing over the next one to two years?
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%).
On average, most investor allocations to private markets are either 5%-10% or 1%-5% of portfolio exposures.
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. 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.
We are committed to address these challenges by prioritising client education such as our private markets knowledge hub and alleviating concerns regarding the robustness and diversification of returns. This will empower clients to navigate private markets with greater confidence and unlock its full potential in wealth portfolios.”
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 funds1 (54%) and closed-ended funds (52%).
1We believe listed funds include REITs or listed private equity funds
What are the primary ways in which your client accesses private market opportunities?
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.”
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, whilst those in the UK (57%) and EMEA (58%) are similar to this region.
For further information, please contact:
Clarence Chen, Schroder Investment Management (Singapore) Ltd. | +65 6800 7397 | |
Thomas Kwan, Penta | +852 9018 2500 |
Note to Editors
The Schroders Global Investor Insights Survey analyses the investment perspectives of global financial professionals on a range of topics across macro themes, sustainability and public and private markets. The 2,830 respondents represent a spectrum of institutions, including pension funds, insurance companies, family offices endowments and foundations, official institutions, gatekeepers and wealth and financial advisers. The respondent universe is collectively responsible for US$74.5 trillion in assets.
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.
Any opinions expressed reflect our results as of July 2024. They are not intended to be a forecast or guarantee of future results. Throughout the report, we complement our global findings with regional results and insights from Schroders experts.
For more information on the Schroders Capital Private Markets knowledge hub, visit:
https://www.schroderscapital.com/en/global/professional/knowledge-hub/
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