Private markets to draw more investor interest this year: survey
This follows the Fed’s move to start cutting interest rates last September, prompting some investors to shift their allocations away from equities
MORE investment advisers are planning to allocate their clients’ assets in private markets this year, after a solid performance in 2024 whipped up appetite.
Hamilton Lane, a global private markets investment management firm, said on Friday (Jan 31) that 30 per cent of 320 advisers it surveyed intended to allocate 20 per cent or more to the asset class in 2025.
Another 29 per cent are looking to dedicate 10 per cent or more. This means a total of 59 per cent of advisers plan to allocate at least 10 per cent to private market investments this year – 15 per cent higher than in the Nasdaq-listed firm’s 2024 survey.
The result “showed a growing enthusiasm around and appreciation for the diversification and performance benefits private markets can provide”, said Steve Brennan, head of private wealth solutions at Hamilton Lane.
The survey follows a bumper year for alternative investments, particularly private equity (PE) in 2024. And this is especially after the US Federal Reserve started cutting interest rates last September, prompting some investors to shift their allocations away from equities.
Globally, the total value of announced PE deals was US$565 billion in 2024, up 25 per cent from 2023, said a Jan 28 report by EY.
Volumes rose by 20 per cent on-year. The report noted that PE firms entered 2025 with US$1.4 trillion in dry powder, with nearly three-quarters of them (73 per cent) projecting higher deployment activity in the next six months.
The Hamilton Lane survey, conducted online from Oct 29 to Dec 4, 2024, found that 45 per cent of the respondents intended to raise their exposure to PE.
This comes second after private infrastructure, for which 48 per cent of investment advisers said they planned to lift their allocation.
The report indicated that all age groups showed an interest in private market investments, but interest was highest – at 94 per cent – among those in Gen X, that is, those born between 1965 and 1980. This was followed by millennials, at 89 per cent, and baby boomers at 77 per cent.
Globally, the Asia-Pacific recorded the highest percentage of clients who were “very interested” in private markets, at 51 per cent.
“Similar to global investors, Asian investors are adding to their private markets allocation in order to diversify their portfolios and add to long-term performance,” said Kerrine Koh, head of South-east Asia at Hamilton Lane.
