Investors in Asia are increasingly seeking diversification and enhanced returns via exposure to private markets. Private banks sound off on demand in the region.
With a weakened outlook across asset classes, it is becoming challenging for investors to find sources of strong returns. As a result, many are increasingly exploring opportunities in alternatives.
According to Pictet Wealth Management’s Asia head of alternative investments Hui Yang Goh during a panel at the «Wealth Management Summit Asia» by FT Live and PWM, there is potential for investors to achieve double-digit returns within private markets.
«Patient Capital»
While private market investments may provide enhanced returns, there are also trade-offs most notably in liquidity. As such, Goh highlighted that this is most suitable for investors with «patient capital».
«The needs, objectives and risk [profile] of every high net worth individual, family office and institutions are different. There is no one size fits all,» she said. «For us as a long-term investor, we believe in staying invested at a steady pace and approach it with a diversification mindset.»
Familiar Markets
Nonetheless, not all investors have the appetite for such risks. According to Ping Ping Lim, vice chairwoman, global family wealth APAC at LGT, part of the demand is being driven by entrepreneurs entering familiar markets.
«What I found is that some families having achieved marvelous success are still in survival mode and not much wanting to [take] risk. Anything that is illiquid requires some discussion,» she observed. «In contrast, there are founders who are entrepreneurs and are risk-takers. They can lean pretty hard into private market. Either they are investing back into the industry they know well or they are forming their passion.»
