The investing universe grows larger all the time, but for investors in publicly available funds, private investing can seem like uncharted territory. Private equity, real estate, and other private assets represent an important part of the investing landscape for institutional and individual investors. Private asset trends can still provide important data points to consider for those who don’t regularly get involved with private assets.
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Recent research from Natixis Investment Managers took a closer look at some key private asset trends. The report found six important trends among private investors. For example, while the 60/40 portfolio has returned, a majority of institutional investors find a 60/20/20 setup more appealing.
That portfolio would include an alternatives allocation, which 65% of institutional investor survey respondents believed would be more likely to outperform a standard 60/40 setup. That may speak to a continued belief that diversifying yield sources helps. Continued macroeconomic uncertainty, too, may be driving interest in diversifying outside of the 60/40.
Private Asset Trends to Watch
In another contrast to more mainstream investing, two-thirds of institutional investors believe private debt will arrive to meet borrower demand. While interest rates continue to pose a challenge for standard borrowing, 6% anticipate private debt growing. The report by Natixis cites research from InfrastructureInvestor.com suggesting private debt AUM will rise to $2.8 trillion by 2028, nearly double from 2022. However, the democratization of private assets is perhaps most relevant for the vast majority of investors. While not as demanded as retirement income or financial planning overall, globally, 34% of individual investors are looking at private investment opportunities. Furthermore, the report underlines that 64% of polled investors shared that the long-term aspect of retirement planning makes private asset a good fit.
Not only then do private asset trends help inform the wider investing audience, but they can also draw those investors into private assets themselves. One way or another, investors should keep an eye on private investing and assets when considering their options.
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