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Laxman Pai, Opalesque Asia: Over the past decade, institutional investors have increasingly turned to private markets to make up for low-yielding bonds. But in 2023, they will likely look for private assets to provide relief on the equity side of the portfolios as well, said a study.
According to the 2023 Natixis Outlook Survey, about half (48%) believe private markets will provide a safe haven in a recession. Confidence in the asset class's ability to fulfill this role has been rising steadily since our 2021 outlook, when only 35% believed there was a safe haven in private assets, and 2022 when 45% thought the same.
The survey of institutional investors, who manage a combined $20.1 trillion in AUM, regardless of whether equity volatility or low yields drive institutions to private markets, institutional teams are finding that a bigger market with more players means they will have to enhance their scrutiny of investment opportunities.
A majority (72%) have stepped up due diligence efforts on private opportunities because they are concerned about deal quality. Many also find that navigating complex private markets and evaluating deals requires specialized expertise. Overall, almost four in ten institutions (36%) plan to use a specialty consultant or an outsourced chief investment officer (OCIO) to guide private markets.
Beyond offering bear market relief, it's clear that institutions still turn to private assets for yield. Few anticipate that rising rates will e...................... To view our full article Click here
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