Global individual investor interest in private markets has grown by 15% in a year according to investment firm Hamilton Lane (Nasdaq: HLNE).
Based on its annual international survey of private wealth advisory firms (conducted in November), 47% of high-net-worth individual investors are now very interested in private markets, inferred from responses that they are already invested or are willing to invest.
That is up 15% from a year earlier when the “very interested” count was 41%.
According to Hamilton Lane’s head of private wealth in Australia, Scott Thomas, the report closely correlates to responses from local high-net-worth individual investors.
The Hamilton Lane Global Private Wealth Survey report quotes a US investment adviser as saying: “Private market investing has helped my clients feel more comfortable staying invested. There is much fear in the stock market, whether that be because of the current political climate, geopolitical events, or high price to earnings ratios.”
The main reasons for interest in private markets remain much the same as a year earlier, performance and diversification. Most investors (76%) expect a higher reward from private markets compared to stocks and bonds.
Asked why their reasons for offering private markets investment opportunities, the leading responses were: to deepen relationships with current clients and to respond to demand from current clients. More than half also saw offering private markets opportunities as a way of attracting new clients.
An Australian private wealth adviser said offering private markets opportunities: “Helped us differentiate our offering from other competitors, compete with more sophisticated firms and retain clients that would have left me to go to those firms. It also increased referral opportunities from existing clients to their contacts.”
Turning to adviser investment intentions, 84% of advisers planned to allocate 5% or more their total investment book to private markets, a 14% increase from a year earlier. Thirty per cent planned to allocate 20% or more.
Of those allocations, preferences were to invest in private equity, private credit and private real estate, in that order.
Hamilton Lane offers Australian high-net-worth individuals access to an evergreen fund – the Hamilton Lane Global Private Assets Fund – that provides exposure to private equity and private credit. The fund has limited monthly liquidity.
Image: Scott Thomas, Hamilton Lane’s head of private wealth in Australia.