Wealth managers and private markets fund managers expect assets under management (AUM) held in semi-liquid vehicles to exceed $3tn (£2.2tn) by 2030, driven by “retailisation” trend, according to a new survey.
New research by European third-party management company Carne Group found that wealth managers plan to put more of their clients’ money into private markets funds, while private market fund managers intend to launch more semi-liquid funds aimed at the retail market.
The survey revealed that 78 per cent of private market fund managers believe the sector will surpass $3tn by 2030, with 54 per cent of wealth managers equally bullish, expecting AUM to reach between $3tn to $3.5tn, although 18 per cent think the figure will climb even higher.
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While 72 per cent of the wealth managers surveyed already use semi-liquid funds for their clients, the remaining 28 per cent are preparing to “follow suit almost immediately”, according to Carne.
Of those not currently offering these funds, 75 per cent expect to start within the next 12 months, and the remaining 25 per cent within the next two years.
Carne reported that 32 per cent of wealth managers expect to have five per cent of their clients’ total investible assets in semi-liquid funds within three to four years, rising to 66 per cent that predict they will reach that five per cent allocation within four to five years.
Currently, just two per cent of the private market fund managers surveyed already have a semi-liquid fund.
However, Carne found that 19 per cent of private market fund managers are considering launching a semi-liquid fund within the next 12 months, with 42 per cent planning a launch in the next 12 to 18 months and 29 per cent looking at a launch within 18 to 24 months.
Overall, more than 90 per cent of the managers Carne surveyed will have a semi-liquid offering in market within the next two years.
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“We are seeing a historic pivot in how private capital is raised and deployed,” said Des Fullam, chief regulatory and client solutions officer at Carne Group.
“Wealth managers are no longer viewing private markets as an optional ‘extra’ but as a core component of a modern, diversified portfolio. For fund managers, this represents a golden opportunity to tap into a massive, relatively untapped pool of retail capital.”
He added: “As the industry moves toward the potential 2030 $3tn milestone, the distinction between ‘institutional’ and ‘retail’ investment strategies is blurring. The next decade of growth in private markets will not be driven solely by pension funds and other institutional investors, but also by the democratisation of access via the semi-liquid wrapper.”
However, for this “retailisation” trend to be sustainable, Fullam called for a commitment to retail investor education.
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Family offices are also looking at private markets more closely, new research by US services provider Ocorian has revealed.
The global study among family members and senior executives working for family offices with total wealth of $119.37bn found that 79 per cent said younger generations are becoming more involved in developing and reviewing investment strategies, while 51 per cent said younger generations have a greater focus on private markets.
