Private credit is becoming increasingly attractive to investors, with nearly half now actively considering allocating capital to the asset class, according to Barclays.
The UK bank’s second annual private markets report revealed that interest in alternatives overall continues to grow. The survey found that almost 50 per cent of investors not currently committing to private markets are considering entering the space, while 79 per cent of all current participants expect to increase their allocations to private markets in the future.
Among current investors, 91 per cent view private markets as an appealing avenue for capital appreciation, and 89 per cent are willing to accept reduced liquidity in exchange for long-term gains.
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“Private markets are no longer a niche; they are becoming a core component of high-net-worth investor strategies,” said Shenal Kakad, global head of private markets at Barclays private bank and wealth management. “This marks a clear evolution from simple access to strategic allocation.”
Barclays’ private markets report surveyed 554 limited partners across the UK, Europe, Asia, Africa and and the Middle East.
Within alternatives, private equity and real estate remain dominant, with 78 per cent and 75 per cent of investors holding exposure respectively.
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However, the landscape is “shifting”, Barclays said, with over two in five investors now actively considering private debt, credit (47 per cent), and venture capital (43 per cent) for future investments. Appetite for secondaries is also on the rise, with a third of respondents considering allocations to the segment.
Among those not currently invested in private markets, real estate is the most appealing entry point (68 per cent), followed by private equity (59 per cent) and private credit (30 per cent).
In terms of structures, co-investments have become increasingly common, Barclays said. More than three-quarters of general partners (GPs) now use co-investment structures for clients. Evergreen and feeder funds are also gaining popularity, with 80 per cent and 71 per cent of GPs, respectively, offering these options.
Despite this momentum, over half of GPs believe the current fundraising environment is less favourable than in previous cycles. However, 73 per cent expect private market performance to improve over the next 12 months.
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