Private Equity: Wealth managers turn to private equity for high returns

Private Equity: Wealth managers turn to private equity for high returns

Private Equity: A survey of 22 senior wealth professionals, with around $5.7 trillion of assets under management, found that half were planning to increase their private equity allocation over the next 12 months.

The research, which was conducted by wealth consultancy Scorpio Partnership and LPEQ, the industry association of listed private equity investment companies, between April and June, found that nearly 40% of respondents planned to invest in listed private equity vehicles in the next year.

More than half of those surveyed said that liquidity – the ability to access and exit on demand – made private equity an attractive asset class. Other reasons given included the ability to control allocation, diversification and getting exposure to private equity at discounted prices.

Cath Tillotson, managing partner at Scorpio, said that wealth managers were embracing private equity as a way of beating inflation and volatility.

Andrea Lowe, executive director at LPEQ, added that increased allocation of the asset class did not signal renewed confidence among wealth managers but the desire to “chase returns”.

Despite this, hedge funds continued to dominate alternative investments in wealth managers’ portfolios, accounting for an average weighting of 58% compared to 11% in private equity. Read More