Ultra-high-net-worth (UHNW) investors are planning to increase their portfolio allocations to private equity, a survey by Titanbay and Campden Wealth revealed.
While UHNW investors currently allocate on average 20% of their portfolios to private equity, they are now looking to decrease their real-estate and cash allocations to increase their private equity and private-debt holdings to 23% and 6% respectively.
Making it the second-largest asset allocation in UNHW portfolios, behind listed equities at 26% and ahead of real estate at 22% making it a mainstream alternative asset class.
Some 67% of respondents said the move was driven by the potential of enhanced returns as well as diversification of their portfolios.
Thomas Eskebaek chief executive at TitanBay said: “The private-equity industry has demonstrated its remarkable robustness in spite of recent economic headwinds, thanks to its ability to offer portfolio diversification and enhanced returns.
“As our study has evidenced, UHNWs are increasingly drawn to private-equity investments, marking a clear shift away from other, more traditional asset classes. With alternatives such as private equity, investors are encouraged to take an increasingly longer-term view of their portfolios.
“What remains to be seen is whether private equity will now become the norm, and if the regulatory landscape can keep pace with heightened interest from sophisticated investors.”
