Private Market Allocations Accelerate

Alternatives such as real estate and private equity may have seen a substantial rise in asset allocations in the last two decades, but private market allocations are accelerating, especially among cash-heavy investors, says Northern Trust. The increased market share of alternative asset classes and the rise and complexity of digital assets is a megatrend the firm has identified. “Cash is a terrible thing to hold, especially in an inflationary environment,” says Gary Paulin, Northern Trust’s head of global strategic solutions. “Every investment manager and asset owner is looking further up the risk and liquidity spectrum to get the profile that they need. That’s taking them into alternative assets.” The report highlights increased use of technology to help asset allocators understand the performance of private assets. Meanwhile, the growing importance of digital assets means that those managers that are not prepared may fall behind