Professional investors (institutional investors and wealth managers) are forecasting rapid expansion in investing in alternative assets by high net worth (HNW) individuals and retail investors, according to new research from Managing Partners Group (MPG).
Currently HNWs and retail investors account for around 5 per cent of assets in the global alternative assets industry, the firm claims, adding that could soar to nearly 9 per cent by 2030.
Professional investors believe a combination of regulatory changes plus advances in investor education and technology is lowering the barriers to investing in alternative assets and that will drive increased investment in the sector by HNW individuals, wealth managers and retail investors.
The average share of alternative asset investment by 2030 was predicted to be 8.8 per cent in the study among 100 professional investors across Switzerland, Germany, Italy, the UK and the US. However more than one in ten (11 per cent) believe the share of alternative assets investments held by HNW and retail investors will be more than 10 per cent by 2030.
The research for MPG found that professional investors are forecasting strong growth in total assets under management in the alternative assets sector.
Alternative asset data company Preqin has predicted the sector will expand to USD23.2 trillion AUM by 2026 compared with USD13.3 trillion in 2021 – but almost all professional investors questioned for MPG’s research believe the value in 2026 will be higher.
More than two out of five (43 per cent) believe total AUM in the alternative assets sector will exceed GBP24 trillion within three years while 40 per cent believe it will be valued at between GBP23.5 trillion and GBP24 trillion.
Jeremy Leach, Chief Executive Officer of Managing Partners Group says: “Alternative assets are gradually moving into the mainstream for HNW individuals and retail investors in response to increasing demand to achieve investment returns that maintain pace with higher inflation continues and their share of the sector is expected to continue growing. The attraction of alternative assets is exactly the same for HNWs and retail investors as it is for institutional investors in that there is no correlation with equities and bonds but previously regulation and a lack of technology have held them back.”
