Asia Pacific’s high-net-worth investors are expressing interest in private assets, including private equity, but have yet to fully channel it into investing in the second-largest region for private market investments.
Over 58% of the region’s rich individuals responding to Lombard Odier’s survey agreed that they want to allocate their wealth to private companies, while about 61% felt there is too much speculation in listed companies.
However, around 31% of the respondents said they have integrated private assets into their portfolio. Lombard said in its report launched Thursday that this is due to a lack of confidence and the need for education on private assets. Its survey shows that about 26% completely agreed that they understand how private assets could help them attain their goals.
Allocation to private assets helps institutional investors attain portfolio diversification, as opposed to volatile publicly-listed assets, across the full economic cycle. But the asset class may not fit with every investor profile due to its long holding period and illiquid nature.
The region’s rich investors are still on the sidelines when it comes to making investments in line with their ambitions, particularly amid macroeconomic uncertainties. About 20% have structured their assets to achieve their goals, while only a fifth of the respondents said they have achieved their goals, Lombard said.
“Even as APAC HNWIs have a deep understanding of their own aspirations, there is clearly a gulf between their intent and their actions,” said Vincent Magnenat, Limited Partner, Asia Regional Head and Global Head of Strategic Alliances, at Lombard Odier.
The wealth manager saw a disparity in viewpoints across generations and investments in themes like sustainable investing and the rise of private assets in risk management strategies for allocations, according to Magnenat.
Similar to private assets, HNIs in the Asia-Pacific region see investments in sustainability as a genuine opportunity while remaining cautious about the sector. Around 18% of the poll respondents said they “have actively increased or plan to increase the proportion of sustainability investments.”
“In this volatile market, HNWIs are relooking at their fundamental values that drive their investment needs,” said Francis Liu, CEO, Private Clients Asia at Lombard Odier.