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Laxman Pai, Opalesque Asia: Many wealthy investors want to increase their holdings of private alternative assets, with between $8 trillion and $12 trillion in household funds available for such assets, said a research study.
About 38% of high-net-worth individuals and 53% of very-high-net-worth individuals would like to increase their allocation of private alternative assets, according to Bain & Co's research paper.
It is estimated that wealthy individual investors ($1m-$30m) group has a wealth of $70 trillion with $8-$12 trillion available for alternative investments.
Private assets under management are highly concentrated in pension funds and other institutions that invest through private equity partnerships. But while individuals account for just 16% of such assets globally, they hold roughly 50% of global wealth. They're looking for greater diversification, and some have noticed family offices allocating a greater share of portfolios to private assets.
Bain said that private equity firms and asset and wealth managers are eager to expand their business with individuals.
For this market to thrive, the current model must evolve into a robust digital system that can efficiently support individual investors at scale, the report said.
Five business archetypes are emerging to overcome the current barriers of high administrative costs, illiquidity, a difficult collateral process for lending, and high minimum investment size.
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