Alternative assets set to gain from HNW and retail investors

A new survey finds that these groups are set to almost double their investments in alternatives by the end of the decade

Alternative assets set to gain from HNW and retail investors
Steve Randall

Alternative assets are set to see a strong rise in interest among high-net-worth (HNW) individuals and retail investors.

A new survey from international asset management group Managing Partners Group (MPG) reveals that institutional investors and wealth managers are predicting the share of assets held by HNW and retail investors to grow from a current 5% to almost 9% by 2030.

The growth will come as the result of several factors including regulatory changes, better understanding of alternatives by investors, and technology lowering the bar to investing in these assets.

More than 1 in 10 respondents believe the share of alternative assets held by retail and HNW investors globally will enter double figures by the end of this decade.

“Alternative assets are gradually moving into the mainstream for HNW individuals and retail investors in response to increasing demand to achieve investment returns that maintain pace with higher inflation continues and their share of the sector is expected to continue growing,” said Jeremy Leach, Chief Executive Officer of MPG.

Value gains

The value of the alternative assets industry is also set to surge according to MPG’s survey.

More than two out of five (43%) believe total AUM in the alternative assets sector will exceed GBP 24 trillion within three years while 40% believe it will be valued at GBP 23.5-24 trillion.

The firm says it has seen strong interest in its Life Settlements funds which are US-issued life insurance policies that have been sold by the original owner at a discount to their future maturity value and have little or no correlation to equites and bonds.

“The attraction of alternative assets is exactly the same for HNWs and retail investors as it is for institutional investors in that there is no correlation with equities and bonds but previously regulation and a lack of technology have held them back,” added Leach.