Research from Wealth Club has shown that independent financial advisers increasingly agree that exposure to private markets is now a necessity for investors seeking to capture a broader spectrum of growth opportunities, with this trend only accelerating over the next five years.
In fact, 94 per cent of the UK-based wealth managers and IFAs surveyed, who are collectively responsible for assets under management of £333 billion, agreed that relying solely on a conventional listed equity portfolio risks missing out on primary wealth-generation engines of the modern economy.
This includes nearly a third (31 per cent) of respondents who strongly agreed that clients need exposure to private markets to access a broader range of growth opportunities while 63 per cent slightly agree.
The study evaluates the explicit benefits that private markets provide over traditional 60/40 portfolios and cites several institutional-grade advantages, with 72 per cent of advisers highlighting the enhanced long-term capital growth benefits. This is followed by inflation protection (48 per cent) and access to unique, non-public market sectors (47 per cent).
A third (35 per cent) of respondents pointed to the benefit of reduced portfolio volatility and a quarter (26 per cent) cited lower correlation with public markets.
Alex Davies, founder and CEO of Wealth Club, says: “These findings suggest private markets are approaching a tipping point among individual investors in the UK.
“For decades, pension funds, insurers and endowments have used private equity and private credit as important components of their portfolios. Increasingly, wealth managers and IFAs believe suitable investors should also have the opportunity to access these strategies.”
According to Wealth Club, this growth is being driven by rising interest from both investors and fund managers reflecting increasing demand for private market investments and the popularity of semi-liquid fund structures.
