Private Markets Allocation Boom May Be 'overblown'

According to a survey by RBC BlueBay Asset Management across 800 fund buyers, wealth managers and consultants, investors do not expect to increase their current 22% allocation to private markets over the next three to five years. 

This is despite just over half of respondents said they expect public markets to outperform private markets over the next five to ten years.

European fund selectors shift towards private markets

According to 46% of respondents, market volatility has not affected the investment case for public equities and fixed income.

The respondents' top three objectives for asset allocation over the following three years further support the argument for public markets, the survey suggests. 

Equities and fixed income remain the top allocation choices for 31% and 26% of respondents, respectively, and the majority of those surveyed (77%) favoured an active approach over a passive one.

Half of respondents foresee a drag on returns due to inflation for at least the next three years, with US wholesale investors the most gloomy of all regions.

Most international wholesale investors (39%) expect portfolio returns to hover around 5-6% over the next three to five years.

Head to Head: The future of private markets

Anthony Pickering, head of business development at RBC BlueBay Asset Management, said: "Against a backdrop of heightened volatility, our research suggests that a majority of wholesale investors continue to favour active management, seeking greater flexibility in portfolios as they navigate these uncertain times." 

"The research also suggests the much-anticipated boom in private markets allocations may well play out more slowly than expected, as investors first seek to address portfolio imbalances caused by market re-pricings through allocations towards public markets."

RECENT NEWS

European Funds Body Throws Support Behind French Capital Markets Union: Implications For Brexit-Era Finance

In a significant development for European finance, a European funds body recently threw its support behind the French ca... Read more

Federal Reserve's Rate Decision: Navigating Economic Uncertainty

The recent decision by the Federal Reserve to adjust interest rates has sparked significant interest and speculation amo... Read more

Building Bridges: Strengthening Investor Confidence Through Enhanced Risk Data In Emerging Markets

In the dynamic landscape of emerging markets, investor confidence plays a pivotal role in driving economic growth and pr... Read more

Reading The Tea Leaves: Analyzing Market Responses To Speculation Of A Fed Interest Rate Increase

As speculation mounts regarding a potential interest rate increase by the Federal Reserve, investors are closely monit... Read more

Tesla's Stock Dilemma: Navigating Through Intensified Global Competition

Tesla, Inc., a bellwether in the electric vehicle (EV) industry, recently announced an ambitious plan to launch more aff... Read more

Evaluating Ukrenergos Standalone Debt Restructuring Versus National Efforts In Ukraine

As Ukraine navigates the complexities of post-war recovery, the debate surrounding the debt restructuring of its state g... Read more