Advisors Boost Allocation to Private Markets as Client Interest Grows

Over half the investment advisors surveyed by Hamilton Lane plan to allocate 10%+ of clients’ portfolios to private markets this year.

By Rethinking65

More than 90% of global investment advisors allocate client capital to private markets and virtually all of them (99%) plan to allocate to this asset class this year, according to a new survey from Hamilton Lane (Nasdaq: “HLNE”), a global private markets investment management firm.

Among the advisors surveyed, 52% plan to allocate more than 10% of clients’ portfolios to private markets, and 70% plan to increase clients’ allocation to this asset class compared with 2023. The majority of advisors (86%) say their clients are interested in private markets. Diversification and performance are driving this increased interest, 82% of the advisors reported

The survey included responses from 232 private wealth firms, RIAs, family offices, and other advisor professionals based in the U.S. Latin America, EMEA (Europe, Middle East and Africa) and the Asia-Pacific region.

More Education Needed

When asked to report their own knowledge of private markets, 97% of the advisors rated their understanding was either advanced (55%) or intermediate (42%).

But 50% of the advisors rated their clients’ as “having little to no knowledge of the asset class and requiring basic education, despite their strong interest in the asset class.” Only 4% of the advisors rated their clients as advanced or well versed in private markets.

“The punchline from this survey was an affirmation that as interest in private markets grows, there is a clear need for more education,” Steve Brennan, head of private wealth solutions at Hamilton Lane said in a release.

“We’ve found that a foundational understanding of the asset class affirms initial interest from new investors and contributes to a sustained investing appetite for those who are already allocated,” he says. “We anticipate that, as private wealth investors become more knowledgeable about and familiar with the asset class, private markets allocations will likely also increase.”

Hamilton Lane worked exclusively in the private-market space for more than 30 years. The company employs approximately 700 professionals operating worldwide and had more than $920 billion in assets under management and supervision as of March 31, 2024.

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