Press Releases Private market demand to increase with a growing number of high-net-worth individuals looking to invest

An additional 32,000 high net worth (HNW) investors are expected to invest in private markets over the next year, according to the latest Praemium and Investment Trends HNW Investor Report 2024. With 73% of private market investors citing expected returns as a primary driver, the appeal of these markets lies in their ability to offer unique opportunities that are not typically available in public markets. This trend is especially pronounced among ultra-high-net-worth (UHNW) individuals, who are actively seeking ways to enhance their portfolio performance and mitigate risks.

Despite the growing interest, many HNW investors face challenges when navigating the complexities of private markets. A lack of liquidity was the primary concern for investors with 40% noting this as a challenge, followed by difficult in assessing risk of investment (28%), lock up periods (23%) and limited knowledge on private markets (22%) rounding out the top four barriers. This highlights the important role advisers have in providing education and guidance, helping clients better understand private market investments and assist with overcoming any challenges.

Key Trends and Insights:

1. Rising participation in private markets
   Currently, 146,000 HNW individuals are investing in private markets, with an additional 32,000 planning to enter this space within the next year. This represents a significant opportunity for advisers to provide guidance and education to investors seeking to diversify their portfolios beyond traditional public market assets.

2. Diversification and higher returns driving demand
   Almost three-quarters (73%) of private market investors cited expected returns as a primary driver influencing their decision to invest, followed by risk profile (55%) and diversification to existing portfolio (51%).

3. Direct investment a common choice for access
   More than half of investors (52%) investing in private markets are doing so directly with the company, issuer or asset manager, with just under a third accessing these opportunities through an adviser.

4. Investors actively seeking out information 
   Investors are actively researching private markets with 62% of those investing in private markets and 49% of those who are currently not investing, researching private markets. Investment newsletters and financial websites were the primary source of information.

As more companies stay private for longer, the investment opportunity in private markets continues to expand. The need for robust platforms that facilitate access and trading support is becoming increasingly important. These platforms play a crucial role in connecting investors with exclusive opportunities and providing comprehensive investment administration and reporting” said Denis Orrock, Praemium’s Chief Strategy Officer.

"Additionally, it offers advisers the opportunity to provide education and access to a growing market and help their clients navigate the private markets with confidence. Our new Spectrum product is designed to provide access to the exclusive investment opportunities that so many high-net-worth investors are seeking and provide advisers with the seamless trading support to allow them to implement these efficiently."