Louise Watson
A third (32%) of Australian investors are feeling FOMO on private asset investments opportunities saying, ‘I feel like I’m missing out on the best opportunities like SpaceX and Open AI’.
Despite Aussies wanting to capitalise on the opportunity in private markets, many don’t understand how private assets work as more than half (56%) think private assets, liked listed assets are priced daily.
This is as (58%) of Aussie investors claim to understand the difference between public and private markets compared to 65% globally.
Natixis Investment Managers, in collaboration with CoreData research, surveyed over 7,000 individual investors globally, with more than $100,000 in investible assets outside of super and the home. Respondents were split 56% female and 44% male, over 30 years of age, and had accumulated a majority of their wealth to invest from employment (64%).
Currently, three in ten (31%) of Aussie respondents invest in private assets, while 54% are interested in investing in private assets but are worried about liquidity.
Natixis IM Country Head Australia and New Zealand Louise Watson said, “With increasing headlines around the opportunity in private markets, ongoing volatility in public equity markets, and the enticing frontier a newer asset class presents, it’s fair to expect investors want in. Education becomes essential as some knowledge gaps remain. Liquidity, the valuation lag, and the return cycle are the top three differences between public and private markets that investors must know.
“While private assets ‘evergreen funds’ aren’t locked up like closed ended funds, they are mainly priced monthly or quarterly. I look forward to seeing how access to private assets improves for individual investors as Platforms build the technology to deal with lower liquidity and less frequent valuations, and investment managers create more evergreen funds.
“Selecting a manager with deep local knowledge in the market they are investing, as well as a track record of delivering value through many market cycles is essential.”
After 15 years of low rates, high returns, and relatively smooth sailing, individual investors around the world are concerned about the impact the current period of instability could have on their long-term investment goals.
This sentiment is echoed at home as four fifths (80%) of Australian investors say ‘if forced to choose, I would take safety over performance and seven in ten (72%) expect market volatility to continue.
Facing ongoing uncertainty, investors are turning towards active investment strategies as 68% said, ‘I don’t want to be locked into only what overall markets can deliver for returns’, and 67% want the opportunity to outperform the market.
Diving deeper into that concern, two fifths (40%) feared that if the Magnificent Seven falter, it would have an outsized negative impact on their portfolios.
Aussie investors are especially sceptical on the longevity of AI. While many have ridden the market highs boosted by AI, 63% think AI is a bubble waiting to be burst and 54% think the risks far outweigh the benefits.
However, facing these fears, investors haven’t grabbed defensive assets with only 22% holding bonds.
In times of such uncertainty, the perceived value of professional advice remains high while trust in many sources has declined over the past four years, those surveyed are now most likely to trust their adviser (91%) when it comes to making investment decisions.
