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Laxman Pai, Opalesque Asia: The global alternatives industry is on track to reach US$29.2 trillion in assets under management (AUM) by 2029 from $16.8tn at the end of 2023, with private equities set to more than double throughout the period, according to a study.
While not part of the official report forecasts, the analysis predicts the industry will exceed $30tn in AUM by 2030.
"This signifies an annualized growth rate of 9.7% in the forecast period, 2023-end to 2029, which represents a slowdown from 10.5% during the 2017-2023 period due to softer expectations for the private equity and venture capital markets," said Preqin in its Future of Alternatives 2029 report.
Meanwhile, global hedge fund AUM is forecast to surpass $5.7tn by 2029, but outflows are predicted to impact performance-based growth. Hedge funds have the slowest forecast annualized growth rate over the 2023-end to 2029 period for all alternative asset classes, at 4.0%.
As per the study, private wealth and weak exit markets are expected to drive secondaries to an annualized growth rate of 13.1%, with secondaries forecast to be the fastest-growing area of alternatives from 2023-end to 2029.
Currently, the secondaries market remains a buyer's market, as investors' portfolios face liquidity constraints. Preqin anticipates ongoing demand for secondaries strategies from the private wealth channel, as they offer inherent advantages for investors new to private markets.
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