Barclays Private Bank and Wealth Management unveils its second annual private markets report, Mind the gap: How private markets can align to the evolving needs of private investors, highlighting research findings that reflect the evolving role that private markets play for wealthy individuals and family offices.
A key research finding from the report is that the vast majority (89%) of those already actively participating in private markets view them as an important part in shaping their overall investment strategy.
The report reveals:
Allocation within portfolios is set to grow
Nearly half (48%) of respondents who were not currently investing in private markets said they were considering entering the space and over three quarters (79%) of all surveyed expect to increase their allocations to private markets in the future.
Almost all respondents who currently invest in private markets see them as an attractive route for capital appreciation (91%), are willing to accept less liquidity for long-term gain (89%) and value the ability to diversify beyond public markets (89%).
Overcoming barriers could unlock more private capital
Nearly half (48%) of those not currently investing in private markets would consider doing so if key barriers were addressed, with over half (56%) citing the main obstacle being perceived risk and uncertainty.
Professional advisers could play an important role here, as 69% of private investors cite that they use trusted wealth managers and/or relationship managers as a key source of advice for information on investing in private markets.
Within Private Markets, Investors favour private equity and real estate
Private equity and real estate remain the leading asset classes within private markets, attracting the majority of current investors (75% in real estate and 73% in private equity). However, the landscape is evolving with over two in five now actively considering private debt / credit (47%), venture capital (43%) and a third considering secondaries (33%) for future investments.
Among those not currently investing in private markets, real estate draws the most interest (68%) followed by private equity (59%) and private debt / credit (30%).
Investor interest in real estate and private equity appears to stem from greater familiarity with these sectors. A significant majority reported a strong understanding of real estate and private equity compared to lower levels of familiarity with other private markets asset classes.
GPs are adapting their offering for private investors
Three in four (75%) GPs describe the current sentiment surrounding private markets with investors as positive. Co-investments have become commonplace, with over three quarters (83%) of GPs using this structure to serve clients, while larger firms managing over $100 billion+ deploy a range of investment strategies including evergreen (80%) and feeder funds (71%) to cater to increasingly sophisticated investor needs.
Despite this, over half of GPs (58%) view the current private markets environment as less favourable compared to previous fundraising cycles but are more positive on the future with nearly three quarters (73%), expecting private market performance to be better in the next 12 months.
Shenal Kakad, Global Head of Private Markets at Barclays Private Bank and Wealth Management, said:
“Private markets are no longer a niche and are becoming a more common component of high-net-worth investor strategies, and we are seeing that private investors are showing a growing level of sophistication in their approach to the asset class. They are scrutinising opportunities more closely, favouring established managers, and exploring structures that offer both performance potential and liquidity flexibility. This marks a clear shift from access to strategy.”
To read the full report, visit: Mind the gap: How private markets can align to the evolving needs of private investors
