Private Asset Product Attract HNWs
Asset managers that can develop innovative private asset products for private wealth channels are set to attract significant business over the next three to five years, says Cerulli Associates. Its ‘European Alternative Investments 2023: Helping Investors Diversify’ report shows that institutional investors remain the region’s major allocators to private assets. In contrast, European high-net-worth (HNW) and ultra-high-net-worth (UHNW) investors are still underexposed to private asset classes, but that is set to change. Its research found most private banks and wealth managers expect their HNW and UHNW clients’ allocations to private assets to increase more than family offices’ allocations, which represents a significant new revenue opportunity for asset managers. However, private banks and wealth managers are also increasingly keen to use technology-driven distribution platforms. More than a quarter (27 per cent) indicated that partnering with distribution platforms will be a high priority for them over the next 12 to 24 months. In addition, it says new semi-liquid products that are yet to come to the market need to be relevant. They need to provide diversification benefits and have a strong focus on sustainability. Asset managers headquartered in Europe saw their private market assets continue to grow in 2022, albeit more slowly than in previous years, and their total assets under management (AuM) exceeded €2.3 trillion (US$2.4 billion) by the end of the year.