Secondaries will be one of the top strategies that Asian institutional investors intend to increase allocation to over the next 12 months, according to the latest poll conducted by global investment firm Cambridge Associates.
Currently, growth equity, venture capital, private credit, and buyouts stand out as some of the most popular strategies among their clients which are expected to see an increased allocation within the next year.
The poll was conducted among institutional investors, private clients, and family offices based in Singapore and Hong Kong.
About 90% of the 55 clients polled are currently allocating to private investments, with three out of four indicating their intention to increase their allocation within the next year.
68% of institutional investors polled have growth equity as an existing investment strategy, while 60% indicated private credit as the top strategy they want to increase allocation to over the next 12 months.
Venture capital is a popular private investment strategy for private clients and family offices, with 90% of those polled having it as an existing strategy. It continues to be their top category for increased allocation, followed by private credit.
Private clients and family offices are planning to put more capital to work in co-investments over the next 12 months.
Asia’s investors recognise that private asset classes can be a growth engine and may outperform portfolios over time. The majority of the firm’s clients are already investing in one or more private investment strategies.
Most Asian investors were also keen to increase their commitments to regions outside of their home market, according to the poll, with nearly three-quarters of them (institutional clients, private clients and family offices) indicating the US as the preferred region for increased allocation.
“In our experience, private market returns have continued to outperform public markets over longer horizons, which we believe makes private investment asset classes attractive to investors, despite the private markets undergoing a reset following the 2021 environment,” said Vish Ramaswami, Partner and Head of Asia-Pacific Private Investments, Cambridge Associates.
He indicated that the proliferation of strategies, sectors and fund sizes in the private market landscape does make it a complex and fragmented market to navigate. And hence, identifying the right managers will be key to delivering returns for investors.
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