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Laxman Pai, Opalesque Asia: 4 in 10 of its high-net-worth investors (HNWI) and ultra-HNWI clients are allocating more than 20% of their portfolio to alternatives, said a study.
According to Connection Capital's 2023 survey, over 3/4 (76%) of HNWIs are now targeting an allocation to alternatives of more than 10% of their portfolio reflecting how mainstream the asset class has become. Alternative investments include private equity, private debt, commercial property, and alternative fund strategies.
"The two main reasons for allocating to alternatives were cited as a diversification from quoted markets (73% of respondents) and to target outsize capital returns (69% of respondents)," it said.
The most sought-after investment opportunity type was single-asset private equity transactions, with a sector preference for technology and health, followed by investments in private equity buyouts and growth funds.
Despite the volatility of the past 12 months, the results are consistent with the findings of last year's survey, suggesting investors now view allocating to alternatives as evergreen and a core part of managing their portfolio.
When asked about the greatest threat to alternative investment performance over the next 12 months, Connection Capital's clients rated interest rates number 1 (62% of respondents).
Claire Madden, Managing Partner at Connection Capital, said: "Public market volatility and lackluster returns continue to...................... To view our full article Click here
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