Asian investors chase private market exposure despite hazards

Despite challenging funding conditions in private equity, institutional investors and family offices across Asia are increasing allocations to private markets.

61% of APAC institutional investors say they increased allocations to private markets in 2024, with 59% saying they are now looking to new private market niches, including AI, according to data collected by Natixis IM’s Institutional Investor Survey 2024, provided to AsianInvestor.

“Asian investors have always favoured private markets; today, when it comes to alternatives it’s all private, all of the time,” Dave Goodsell, executive director, centre for investor insight, Natixis IM in Boston, US, told AsianInvestor.

The proportion describing themselves as bullish on the sector increased from 53% in 2023 to 78% this year, according to the survey, which polled 72 institutional investors in APAC, collectively accounting for $6.7 trillion, and was published on 5 December. 67% said they believed the delta between private and public markets remained elevated compared to historical levels.

APAC investors’ growing optimism exceeds that of their global peers; worldwide, respondents declaring themselves bullish on private markets increased from 60% to 73% over the period.

"From what I’m hearing from clients, including Australian superannuation funds, there is a growing appetite for private equity as investors look to diversify away from expensive-looking equity valuations and well-established fixed income portfolios to reduce risk and maximise the chances of higher returns,” Louise Watson, country head for Australia and New Zealand for Natixis Investment Managers in Sydney, told AsianInvestor.