- Annual global report, surveying more than 300 investment
advisors, finds diversification and performance continue to drive
private wealth interest in the asset class
- Private infrastructure is poised to gain market share, with
48% of those surveyed planning to increase exposure in that
sector
- Despite interest, many investors have only "beginner"
knowledge of the asset class, highlighting importance of ongoing
education as well as opportunity to deepen client
relationships
CONSHOHOCKEN, Pa., Jan. 29,
2025 /PRNewswire/ -- Private market allocations are
rapidly becoming a significant portion of advisors' book of
business, according to a recent survey of investment advisors
conducted by global private markets investment management firm
Hamilton Lane (Nasdaq: HLNE). In fact, nearly one-third (30%) of
survey respondents report they plan to allocate 20% or more to the
asset class. Another 29% plan to allocate 10% or more, meaning
that a total of nearly 60% of the financial professionals surveyed
plan to allocate 10% or more to private market investments in 2025.
This is a 15% increase from the firm's 2024 survey and marks a
notable shift in comfort with the asset class and growing interest
among individual investors.
Interest in infrastructure investing
Private infrastructure is poised to gain market share according
to the survey, with 48% of respondents planning to increase
exposure in that sector. This finding affirms a broader trend of
growing investor interest in private infrastructure as the benefits
become more widely understood, including: high barriers to entry,
durable cash flows, competitive total returns, income yield and
portfolio diversification. While infrastructure saw the biggest
uptick in interest, private equity and private credit followed
closely behind, with those strategies currently in the top two
spots in terms of overall portfolio allocation.
Attractiveness of private markets
More than three-fourths (76%) of respondents said their clients
see private markets as providing higher reward compared to stocks
and bonds. Why? Performance and diversification. When asked why
clients are interested in private markets, the results this year
were almost identical to last year's survey, with these two factors
cited most frequently, significantly outpacing other responses
(sector exposure, liquidity or "other").
Increased acumen but knowledge gap persists
Despite increased acumen on the part of advisors, with 63%
rating their knowledge of the asset class as "advanced" (compared
to 55% in last year's survey), for the remainder of the respondent
base there is still a knowledge gap. Hamilton Lane offers resources
such as the Knowledge Center and Chart of the
Week to help advisors and clients develop private markets
acumen to further their investment objectives.
Other key findings
- One key reason advisors offer private market investments is to
have a competitive edge when attracting and retaining clients, with
70% of advisors reporting that helping clients invest in private
markets deepens those relationships.
- While all age groups show an interest in private market
exposure, interest is highest among Gen Xers (94%), Millennials
(89%) and Baby Boomers (77%). Following were Gen Z (59%) and those
aged 75+ (43%).
- Globally, Asia Pacific (51%)
and the Americas (48%) reported the highest percentage of clients
who are "very interested" in the asset class. Unsurprisingly,
knowledge of the private markets correlated with interest, with
those regions topping the number of those who described their
knowledge as either "advanced" or "intermediate."
Steve Brennan, Head of Private
Wealth Solutions at Hamilton Lane, commented: "This year, our
survey results showed a growing enthusiasm around and appreciation
for the diversification and performance benefits the private
markets can provide. Just a few years ago, we would never have
expected to see nearly 60% of advisors planning to allocate 10% or
more of clients' portfolios to this asset class in the coming year.
To us, this reinforces the growing understanding of the wealth
creation opportunities within the private markets.
"As we look ahead, we expect interest in the infrastructure
space to continue to grow, and hope to see investors who describe
their knowledge of the private markets as 'advanced' tick up even
further. At Hamilton Lane, we continue to be focused on bringing
high-quality private markets investment opportunities to advisors
and their clients while expanding investor access and knowledge of
this asset class."
For more information on Hamilton Lane's Private Wealth business,
click here. To view the full report and findings, click here.
Survey Methodology
The online survey was conducted from October 29 to December 4, 2024. The 320 global
respondents included private wealth firms, RIAs, family offices and
other advisor professionals from APAC, Canada, EMEA, LatAm, the Middle East and the U.S.
About Hamilton Lane
Hamilton Lane is one of the largest private markets investment
firms globally, providing innovative solutions to institutional and
private wealth investors around the world. Dedicated exclusively to
private markets investing for more than 30 years, the firm
currently employs approximately 730 professionals operating in
offices throughout North America,
Europe, Asia Pacific and the Middle East. Hamilton Lane has more than
$947 billion in assets under
management and supervision, composed of more than $131 billion in discretionary assets and
approximately $816 billion in
non-discretionary assets, as of September
30, 2024. Hamilton Lane specializes in building flexible
investment programs that provide clients access to the full
spectrum of private markets strategies, sectors and geographies.
For more information, please visit www.hamiltonlane.com.
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SOURCE Hamilton Lane
