Nearly 60% of Advisors Plan to Allocate 10% or More to Private Markets: Hamilton Lane
A recent Hamilton Lane survey of 320 investment advisors reveals that nearly 60% plan to allocate 10% or more to private market investments this year, a 15% increase from the 2024 survey, with 30% aiming to allocate 20% or more, highlighting the growing acceptance of private markets and increasing interest among individual investors.
In private markets, 48% of surveyed investment advisors plan to increase exposure to infrastructure, citing benefits such as high barriers to entry, durable cash flows, competitive total returns, income yield, and portfolio diversification. Infrastructure investments have seen the largest increase in interest among surveyed advisors, followed closely by private equity and private credit, which currently hold the top two positions in overall portfolio allocation.
According to the survey, 76% of respondents stated that clients view private markets as offering higher rewards than stocks and bonds, primarily due to performance and diversification. These factors were overwhelmingly cited as the main reasons for client interest in private markets, consistent with last year’s results and far surpassing other considerations like sector exposure, liquidity, or other reasons.
Despite an increase in advisor expertise, with 63% rating their knowledge of private markets as “advanced” (up from 55% in last year’s survey), there remains a knowledge gap among the remaining respondents.
The survey revealed other key findings. A key reason advisors offer private market investments is to gain a competitive edge in attracting and retaining clients. According to the survey, 70% of advisors report that helping clients invest in private markets strengthens and deepens client relationships.
Interest in private market exposure is highest among Gen Xers (94%), Millennials (89%), and Baby Boomers (77%). In comparison, Gen Z shows a 59% interest, while those aged 75 or over have the lowest interest at 43%.
Globally, Asia Pacific (51%) and the Americas (48%) reported the highest percentage of clients who are “very interested” in private markets. Knowledge of the asset class correlated with this interest, as these regions also had the highest number of individuals who rated their knowledge as either “advanced” or “intermediate.”
“This year, our survey results showed a growing enthusiasm around and appreciation for the diversification and performance benefits the private markets can provide,” said Steve Brennan, head of private wealth solutions at Hamilton Lane. “Just a few years ago, we would never have expected to see nearly 60% of advisors planning to allocate 10% or more of clients’ portfolios to this asset class in the coming year.”
“As we look ahead, we expect interest in the infrastructure space to continue to grow and hope to see investors who describe their knowledge of the private markets as ‘advanced’ tick up even further,” he added.
The online survey was conducted from October 29 to December 4, 2024. The respondents included private wealth firms, RIAs, family offices and other advisor professionals from APAC, Canada, EMEA, LatAm, the Middle East and the U.S.
