Blackrock Survey Shows Most Investors Look to Raise PE, Private Credit Holdings This Year
More than 70% of investors intend to increase their allocations to private equity this year, though it remains to be seen if recent bank failures have changed that view, according to BlackRock Alternatives’ inaugural Global Private Markets Survey.
The survey, which captures the views of capital allocators representing $3.2tn invested in private markets – approximately a quarter of the global private market’s institutional investment landscape – also reveals that more than half of all investors based in the US and Canada plan to increase their allocations across asset classes this year.
In the Asia-Pacific region, more than two-thirds of respondents plan to add to their private credit allocations. In EMEA, 71% plan to increase their private equity allocations.
“The results of our inaugural Global Private Markets Survey show sophisticated investors have moved on from the 60/40 allocation model and that private assets will continue to grow as a percentage of global portfolios,” said Edwin Conway, global head of BlackRock Alternatives.
Income generation emerges as the most important factor driving private markets investments, with 82% identifying it as the key factor. Just under 60% said capital appreciation was also a factor.
The search for income has translated into significant investor interest in private credit, particularly infrastructure and real estate debt, as well as distressed strategies. More than half of respondents globally plan to add to their private credit holdings. In the US and Canada, more than a third expect to “substantially increase” their private credit allocation in 2023.
While private markets continue to expand, and investors plan to allocate more, there are still factors hindering further investments. Though respondents shared their views prior to the recent bank failures, the survey reveals that they see liquidity as the single biggest barrier.
The report surveyed senior executives and allocators at more than 200 institutions between October 2022 and January 2023.