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Nearly two-thirds (63%) of financial advisors surveyed said they expect to increase their client or model portfolios' exposure to private credit in the next 12 months, while 83% said they expect to increase their exposure to alternative assets over the same period.

By comparison, 83% of advisors surveyed said that currently fewer than 10% of their clients have a portion of their portfolio allocated to private credit.

"Canada is significantly behind other developed countries when it comes to retail investors allocating to alternative investment strategies, including private credit," said John Wilson, Co-CEO and Managing Partner of Ninepoint Partners. "But our pension plans - some of the most sophisticated investors in the world - have been early adopters, allocating as much as 50% or more of their assets to alternative strategies, including private credit."

The survey results seek to shed more light on the current state of the Canadian private credit market as well as the alternative investments market, reflecting the theme of the 2023 conference: "Asset Allocation and the Smoother Investor Journey."

When respondents were asked about the broader market sentiment surrounding alternative assets in Canada, additional findings from the survey included:

Canadian Market Sentiment on Private Credit Skews Neutral to Positive: 30% of advisors surveyed described the general market sentiment toward private credit in Canada as very positive or somewhat positive. 38% of advisors described the current market sentiment as neutral.

Diversification Shines as Private Credit's Advantage: 45% of advisors surveyed identified improving diversification as the most compelling advantage of private credit in the current market. Other advantages identified by advisors included enhancing returns (23%), offering distinctive solutions (19%) and providing income (13%).

Persistent Inflation Drives Opportunity in Infrastructure and Private Credit: When asked which alternative asset classes they would be most likely to increase allocations to if inflation continues, 44% of advisors surveyed selected infrastructure, followed by private credit (41%), equities (41%) and real estate (38%). [Note: Respondents could select more than one option.]

"Our journey has been to help educate advisors on the benefits that alternative investments can have for their clients' portfolios," Wilson added. "Private credit and other alternative investments help to smooth out returns over the long run because they are less correlated to traditional equity and fixed income products, which means that in times of extreme volatility, they have the potential to act as a ballast in an investor's portfolio."

The survey was conducted during Ninepoint's second annual Alt Thinking Global Investment Forum held at the Fairmont Royal York Hotel in Toronto on September 20, 2023. The event convened more than 300 of Canada's top financial advisors to discuss the latest thinking on asset allocation, with an additional 354 financial advisors across Canada joining the live, online streaming version of the event.

Notable speakers at the conference came from across the global investment industry and included Edwin Cass, Senior Managing Director and Chief Investment Officer of CPP Investments; Carly Tripp, Global Chief Investment Officer and Head of Nuveen Real Estate Investments; Satish Rai, Senior Advisor and Former Chief Investment Officer of OMERS; Mick Solimene, Managing Director, Portfolio Manager, HNW Portfolios of Monroe Capital; Arif Bhalwani, CEO and Managing Director of Third Eye Capital; and Joe Lee, Managing Director of Churchill Asset Management.

The conference also featured keynote presentations from Morgan Housel, best-selling author of The Psychology of Money and Michael Lewis, best-selling author of Flash Boys, Liar's Poker, Moneyball, and The Big Short.