More than eight in 10 asset managers either already offer or plan to offer private markets strategies to retail investors, according to a survey by State Street, as the investor base for alternative assets continues to broaden.
State Street’s fifth annual Private Markets Study found a structural shift towards individual investor participation in private markets, with firms increasingly expanding access through wealth management channels.
Overall, 84 per cent of asset and wealth managers either already offer or plan to offer private markets strategies for individual investors.
Read more: Oaktree Private Credit Fund redemptions fall below 5pc
Around 43 per cent of firms expect individual-focused vehicles to account for at least half of private markets fundraising within the next three years, marking a significant shift from the sector’s traditionally institutional investor base, the survey found.
However, nearly eight in 10 firms cited liquidity management as the biggest challenge as demand from individual investors accelerates. Key pressure points include redemption management, cash forecasting and liquidity stress testing, State Street revealed.
“Delivering private markets to a broader investor base at scale is fundamentally reshaping how the industry operates,” said Joerg Ambrosius, president of investment services at State Street. “Success will depend on who can manage complexity and deliver consistent outcomes across a much wider set of clients.”
State Street’s research also found that artificial intelligence (AI) and AI infrastructure is the top investment theme in private markets globally.
Read more: Fitch says non-traded BDCs can withstand redemptions surge
