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Alternative Market Briefing

Wealth managers expand the range of investment strategies, adding new asset classes

Wednesday, September 01, 2021

Laxman Pai, Opalesque Asia:

Wealth managers are adding new asset classes they offer to clients, including private markets and hedge funds, said a survey.

The Wealth Manager Investment Survey by bfinance revealed that more than two-thirds (69%) said they have added new asset classes for wealth clients within the last three years, with 53% stating they will do in the next two years.

60% now provide exposure to private equity, 52% use emerging market debt, 52% use private credit, 48% use infrastructure and a further 42% provide access to hedge funds.

Looking at allocations, the majority of wealth managers have reduced the proportion of wealth client assets invested in fixed income (63%) while 66% have increased allocations to equities and 61% have increased allocations to private markets strategies.

The shift towards alternatives is set to continue strongly in the next two years, with improving sentiment towards liquid alternatives such as hedge funds, but only a minority plan to increase equity exposure. The surge of passive investment is also slowing: just 21% of wealth managers expect to increase their use of passive strategies in the next two years, compared to 50% in the last three years.

Passive strategies took a hit as only 21% of respondents expected to increase their use in the next two years. 80% of wealth managers now integrate ESG considerations as part of their offering, up from 37% three years ago.

When it comes to the ESG agenda, three strat......................

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