In a turbulent macro-economic environment, investors with very high incomes are now looking to invest almost as much in Private Equity as in listed shares. This is the finding of the latest study by Titanbay and Campden Wealth.
Wealthy individuals currently allocate 26% of their portfolios to listed equities, which have long been the backbone of most diversified investment portfolios. Private Equity stands at 20%, just below real estate (22%).
However, the survey of 120 high-net-worth European investors reveals that they want to reduce the share of listed equities and cash, and increase their share of Private Equity to 23%.
84% of high-net-worth investors are already invested in Private Equity, and 10% are actively interested in this asset class.
2/3 of survey respondents cited potentially higher returns as their main motivation for getting involved in Private Equity, as well as its status as a portfolio diversifier and a hedge against economic volatility. Private Equity firms are already more interested in high net worth individuals.
Last year, KKR appointed Partner Todd Builione as its first Global Head of Private Wealth Management, to oversee the company's "strategic priority" of building a private wealth distribution platform. Last March, KKR reinforced this strategy by appointing Paula Campbell Roberts as Head of Investment Strategy for Private Wealth Management.
Thomas Eskebaek, Managing Director of Titanbay explains: "The Private Equity sector has demonstrated its remarkable robustness despite recent economic obstacles, thanks to its ability to offer portfolio diversification and increased returns". He continues: "As our study shows, private investors are increasingly attracted to Private Equity investments. With alternatives such as Private Equity, investors are encouraged to take a longer-term view of their portfolios. It remains to be seen whether Private Equity will become the norm, and whether the regulatory framework will be able to respond to the increased interest of sophisticated investors."
