Private clients slow to embrace alternative investments: BlackRock official

PRIVATE bankers are eager to persuade clients to put larger allocations into alternative investments including private market assets. But the private wealth market remains “immature”, says Edwin Conway, BlackRock’s global head equity private markets.

High-net-worth investors’ allocation into alternatives range between 3 per cent and 5 per cent. In contrast, institutions such as sovereign wealth funds, pension plans and larger family offices allocate at least 25 per cent, notes Conway. “We find it amusing that the assets are still called ‘alternatives’. It’s such a critical part of institutions’ portfolios in a world where asset classes have started to behave differently. Clients are looking to allocate more but the weightings are changing.”

He explains that institutions typically favour the private equity and real estate asset classes – more mature segments of private market assets – but are now placing a greater weightage on infrastructure and private credit.