Prime Highlights:
- Investments in alternative assets are expected to exceed $32 trillion by 2030, driven largely by wealthy investors.
- Private credit assets alone are projected to double to $4.5 trillion by 2030.
Key Facts:
- Family offices plan to increase their private equity allocations, with 55% aiming to invest more in the next 12 months.
- Total assets under management in alternatives are forecast to rise by 60% over the next five years.
Background:
Investments in alternative assets are expected to surge past $32 trillion by 2030, fueled largely by ultra-wealthy investors, according to a recent report from Preqin.
The report shows that total assets in alternative investments, including private equity, hedge funds, real estate, venture capital, infrastructure, natural resources, and private credit, are expected to grow by 60% over the next five years. This growth is coming from a rise in IPOs and mergers and lower interest rates. Assets in private credit alone are expected to double to $4.5 trillion by 2030.
Although fundraising from institutional investors has slowed, with total private equity fundraising dropping from $676 billion in 2023 to under $500 billion this year, the industry is increasingly looking to wealthy investors for growth. Ultra-high-net-worth individuals, family offices, and private-wealth managers are expected to provide 30% to 40% of flagship fund capital in the coming cycles.
Family offices, which cut their private equity allocation from 26% in 2023 to 23% in 2025, are now showing renewed interest in private equity and direct investments. A survey from BNY Wealth found that 55% of family offices plan to increase their allocation to private equity funds in the next 12 months, the highest among all asset classes.
The report said that as institutions adjust their investments, private wealth could become an important source of funding, and many big managers expect private wealth capital to double soon.
The findings suggest a bright future for alternative investments, as wealthy investors’ confidence and funds are expected to create strong growth opportunities in private markets over the next ten years.
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