Nine in ten wealth managers (92%) and financial advisers expect retail and high net worth investors to invest more in private markets over the next five years, according to a new study.
Over three quarters (89%) of wealth managers and IFAs deemed private market access as critical, with 30% categorising it as essential, according to the report from HNW platform Wealth Club.
Nine in ten (94%) of the wealth managers and IFAs surveyed said they believed clients relying solely on a conventional listed equity portfolio were missing out on the primary wealth-generation engines of the modern economy.
A third (31%) strongly agreed that clients needed exposure to private markets to access a broader range of growth opportunities.
When asked what benefits private markets provide over traditional 60/40 portfolios, 72% highlighted enhanced long-term capital growth, half named inflation protection (48%) and non-public market sectors (47%). A third (35%) pointed to the benefit of reduced portfolio volatility and a quarter (26%) cited lower correlation with public markets.
Alex Davies, founder and CEO of Wealth Club, said: "These findings suggest private markets are approaching a tipping point among individual investors in the UK. For decades, pension funds, insurers and endowments have used private equity and private credit as important components of their portfolios. Increasingly, wealth managers and IFAs believe suitable investors should also have the opportunity to access these strategies.”
Wealth Club surveyed UK-based wealth managers and IFAs responsible for assets under management of £332.7bn.