Private Markets Offer Diversification
Retail investors should be considering how investing in private markets could help them diversify their portfolios, says a global poll of investors by State Street. It found two thirds of respondents say alternative assets can add value for retail investors who are seeking new sources of diversification. More than seven in 10 said that private market assets would be more attractive for retail investors as transparency improves and almost six in 10 think digital fractionalization of private markets assets would contribute to this trend. However, democratization will place fresh demands on private market managers from a regulatory and transparency perspective. The majority of managers believe regulators will be compelled to introduce more stringent reporting requirements as retail participation rises. This makes it critical for private managers to enhance their data management, which will help them reach the next stage in their growth.