Private investments continue to be an attractive asset class among investors in Asia, according to the latest poll conducted by global investment firm Cambridge Associates (CA).
According to the study — which was conducted among institutional investors, private clients and family offices based in Singapore and Hong Kong — investors are eager to increase their commitments in private investments in the long term.
Out of clients polled, about 90% are currently allocating to private investments, and close to three in four clients indicated their intention to increase allocation within the next 12 months.
The firm believes investors in Asia have a sophisticated understanding that private asset classes serve as an engine of growth and may deliver outperformance in portfolios over the long term.
Some of the most popular strategies across CA’s clients polled include growth equity, venture capital, private credit and buyouts. The same strategies remain the top choices when inquired which strategies they are keen to increase allocation to within the next 12 months.
That said, there are some key differences identified from the poll. For one, growth equity is the most popular private investment strategy for institutional investors, with 68% of those polled having it as an existing strategy. Meanwhile, over 60% of institutional investors polled indicated private credit as the top strategy they want to increase allocation to over the next 12 months.
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Venture capital is the most popular private investment strategy for private clients and family offices, with 90% of them polled having it as an existing strategy. This continues to be their top strategy of choice to increase allocation over the next 12 months, with private credit coming in at a close second.
Beyond the four most popular strategies listed above, institutional investors view secondaries as one of the top strategies they intend to increase allocation to over the next 12 months. On the other hand, co-investments emerged as one of the top strategies that private clients and family offices are ready to put more capital to work in over the next 12 months.
The poll also found that geographical diversification was a key consideration for Asia investors, as most clients were keen to increase their commitments to regions outside of their home market.
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In particular, nearly three-quarters of institutional clients, private clients and family offices indicated the US as the region they intend to increase allocation to in the near term.
Vish Ramaswami, CA’s partner and head of Asia Pacific private investments, believes the asset classes’ attractiveness is due to its outperformance over public markets in longer horizons. This is despite the private markets undergoing a reset following the 2021 environment.
“That said, the proliferation of strategies, sectors and fund sizes in the private markets landscape makes it a complex and fragmented market to navigate. Identifying the right managers will be key to delivering returns for investors,” he adds.
