Investors in search of returns are rushing into private markets.
Unlisted assets under management are forecast to top $17tn by 2025
Historically low interest rates and high stock valuations are driving return-hungry investors to rush into private markets, with non-publicly listed assets under management expected to rise 60 per cent between 2020 and 2025. Alternatives — a category of unlisted assets that include private equity, private debt, hedge funds, real estate, infrastructure and natural resources — are set to surpass $17tn in AUM within the next four years. Private equity and private debt will be the main drivers of this growth. Because of lower rates, clients are ready to give up some liquidity to get a higher return. This boom in demand has spurred consolidation in the sector especially in countries with low penetration rates and fast GDP growth as an attractive factor. The private capital industry has grown to exceed $7tn in the past few years.