Wealth Adviser Newsletter 23.09.22

Wealth managers rebalance to private markets

News came this week that a new company, Private Markets Alpha (PM Alpha), has been recently launched, dedicated to improving access to private markets for the global wealth management industry.
The launch coincides with the publication of a study by CoreData which reveals a significant shift of focus from public to private markets, which was written up by Harriet O’Brien for Wealth Adviser this week.
Over at Private Markets Alpha, Tom Douie, PM Alpha Founder and CEO says: "Aside from generally improving access to private markets by addressing all the typical barriers to entry for a wealth management firm to offer such strategies, we are confident our curated, thematic private markets tool kit delivers the tangible ‘alpha’ benefits of a strong product design and manager selection leading we believe to superior performance outcomes, a structuring benefit (such as shorter life funds) and a cost advantage on the product itself."
And the CoreData study, based on the findings of a poll of 130 European fund selectors about attitudes to private markets found that nearly a third of respondents are switching their investment focus from public to private markets and that 31 per cent think that private markets will outperform public markets.
More than half the survey’s respondents (51 per cent) say low bond yields and rising inflation are compelling their organisation to look for opportunities in private debt.
The report also cites an expanding set of opportunities in private markets as fewer companies go public or opt to delay IPOs. Reasons for companies staying private for longer include avoiding the compliance and regulatory costs of listing, evading the shareholder scrutiny that public firms face and maintaining control over operations.
Founder and principal of CoreData, Andrew Inwood, comments that the study shows how "private markets are fast becoming central to investment strategies as they move from the alternative to the mainstream."
Sustainability is a big driver. Investors are not only turning to private markets to get superior returns, they are also seeking greener returns.
Beverly Chandler, Managing Editor
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