Alternative assets have peaked the interest of nearly a third of investors, who plan to increase their allocations to the sector in the next year, according to data from Coller Capital, which invests in secondary markets for private capital.
Coller Capital’s 40th Private Capital Barometer survey interviewed 110 private capital investors with over $2trn in assets under management combined. Of the respondents, about 60% of investors intend to keep the same exposure to alternative investments across the next 12 months.
Private credit was the most appealing area for the surveyed investors, with 45% looking to increase target allocation, while 33% planned to increase infrastructure and 31% private equity. Another 38% planned to increase exposure to private markets secondaries.
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Jeremy Coller, chief investment officer and managing partner of Coller Capital, said: “These findings are a huge vote of confidence for alternative assets. LPs stand ready to not just maintain their allocations but to actively increase them as they seek attractive, long-term risk adjusted returns. Nowhere is that clearer than in private market secondaries, where LPs have seen the diversification and liquidity on offer.”
The interviewed investors also predicted an increase in distributions for 2024 from 2023 in private equity, with 86% believing there would be an uptick.
Within the industry, investors expect a move towards mergers and acquisitions. 64% believe that in the next two years, at least one of the private equity managers they invest with will merge or be acquired. In Europe specifically, this increased to 73%.
The ‘star dealmaker’ has also gone out of favour with investors, with just 22% marking them as the key feature for performance. Instead, 78% pointed to “repeatable, sustainable processes and firm-wide networks”.
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