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Private Wealth looks to the Seondaries Market

Wealth investors continue to diversify their portfolios as private market players continue to broaden their offering. Traditionally high barriers to entry, coupled with the longevity of private investments had been at the forefront of wealth investor's concerns. However, wealth investors are increasingly allocating capital to private markets as attractivity and accessibility has changed the landscape for private wealth.

When looking to mitigate exposure to the J-curve, the secondaries market has proven to be highly attractive to private investors. Therefore, private wealth investors are, unsurprisingly, showing increased interest in this market. Secondaries investments provide investors with visibility, as well as protection to downside, and a far shorter term of investment. These reasons alone are an attractive starting point for wealth investors to gain exposure to private investments.

For a wealthy individual who hasn’t invested via private markets funds before and for whom seeing negative returns for the initial period of a closed-end fund’s life may be too much to stomach, this logic holds true too. Elmhirst points out that a 1 percentage point average increase in private markets exposure within private wealth portfolios would be a hugely significant amount of capital. If secondaries can capture even a portion of that, it will be time to bring out the champagne and then some.

Tags

private markets, wealth, private wealth, uhnw, secondaries

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