Hamilton Lane Private Wealth Survey Finds 70% of Global Respondents Planning to Increase Allocation to Private Markets, As Need for Education Continues

Rhea-AI Summary

Hamilton Lane's recent survey reveals that 70% of global investment advisors plan to increase client allocations to private markets in 2024, with 92% already participating in this asset class. Conducted with 232 advisors, the survey highlights performance and diversification as key motivators. Despite advisors' advanced understanding of private markets (97%), there's a significant knowledge gap with their clients, 50% of whom have beginner-level knowledge. The survey underscores the need for enhanced education to align client understanding with growing interest. Initiatives like Hamilton Lane's Knowledge Center are aimed at bridging this gap.

Positive

• 70% of global investment advisors plan to increase private markets allocations.
• 92% of advisors already allocate client capital to private markets.
• 52% of advisors plan to allocate over 10% of client portfolios to private markets.
• 97% of advisors have advanced or intermediate knowledge of private markets.
• Private markets are seen as beneficial for performance and diversification.

Negative

• 50% of clients have beginner-level knowledge of private markets.
• There is a significant knowledge gap between advisors and clients about private markets.

• Global survey of more than 230 investment advisors highlights diversification and performance as key drivers of private wealth interest in the asset class
• Ninety-two percent of respondents currently allocate client capital to private markets, with more than two-thirds planning to increase allocation
• Opportunity to continue educating private wealth investors, as advisors cite a knowledge gap between them and their clients

CONSHOHOCKEN, Pa., June 6, 2024 /PRNewswire/ -- More than 90% of survey respondents currently allocate client capital to private markets, with essentially all of them (99%) planning to allocate some portion of client portfolios to the asset class this year, according to a recent independent survey conducted by leading global private markets investment management firm Hamilton Lane (Nasdaq: HLNE).

Uptake Continues

With more than half of advisors (52%) reporting that they plan to allocate 10%+ of clients' portfolios to private markets, the survey affirmed the broader industry trend of strong, growing interest in the private markets among non-institutional investors. Seventy percent of advisors plan to increase clients' allocation to the asset class compared to 2023.

Advisors cited performance and diversification as the top reasons for the spike in interest in the private markets.

Knowledge Gap

In terms of their own knowledge of the private markets, 97% of advisors report either advanced (55%) or intermediate (42%) understanding. While advisors are knowledgeable, their clients may not be.

The survey found that advisors acknowledge that their clients believe alternatives may provide portfolio benefits but may not be educated enough on the asset class.

For example, 50% of advisors rate their clients' knowledge about private markets investments as beginner, or having little to no knowledge of the asset class and requiring basic education, despite their strong interest in the asset class. Only 4% of advisors rated their clients' knowledge about private markets as advanced, or well versed in the asset class and confident in talking about private market details, trends and products. In other words, there is an opportunity to increase end investors' private markets knowledge.

"The punchline from this survey was an affirmation that as interest in private markets grows, there is a clear need for more education," said Steve Brennan, Head of Private Wealth Solutions at Hamilton Lane. "We've found that a foundational understanding of the asset class affirms initial interest from new investors and contributes to a sustained investing appetite for those who are already allocated. We anticipate that, as private wealth investors become more knowledgeable about and familiar with the asset class, private markets allocations will likely also increase."

When asked what private markets tools and information advisors would find helpful in their practice, advisors cited education, thought leadership and events as the top three ways to improve their clients' knowledge of the asset class.

"Our survey shows that giving private wealth clients more opportunities to learn about private markets investing can help both advisors and clients achieve their goals," said Brennan. "Resources like Hamilton Lane's Knowledge Center, Chart of the Week and our ongoing podcast series, Private Markets Made Human, were created to help advisors and clients develop private markets acumen to further their unique investment objectives."

To view the full report and findings, click here. 

Survey Methodology 

The online survey was conducted from November 27 – December 22, 2023. The 232 global respondents included private wealth firms, RIAs, family offices, and other advisor professionals from the U.S., Canada, LatAm, EMEA and APAC. 

About Hamilton Lane

Hamilton Lane (Nasdaq: HLNE) is one of the largest private markets investment firms globally, providing innovative solutions to institutional and private wealth investors around the world. Dedicated exclusively to private markets investing for more than 30 years, the firm currently employs approximately 700 professionals operating in offices throughout North America, Europe, Asia Pacific and the Middle East. Hamilton Lane has over $920 billion in assets under management and supervision, composed of more than $124 billion in discretionary assets and approximately $796 billion in non-discretionary assets, as of March 31, 2024. Hamilton Lane specializes in building flexible investment programs that provide clients access to the full spectrum of private markets strategies, sectors and geographies. For more information, please visit our website or follow Hamilton Lane on LinkedIn.

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SOURCE Hamilton Lane

FAQ

What percentage of investment advisors plan to increase allocations to private markets in 2024?

70% of global investment advisors plan to increase allocations to private markets in 2024.

How many advisors currently allocate client capital to private markets?

92% of advisors currently allocate client capital to private markets.

What are the main reasons advisors are interested in private markets?

Advisors cite performance and diversification as the main reasons for interest in private markets.

How knowledgeable are advisors about private markets?

97% of advisors report having either advanced or intermediate knowledge of private markets.

What is the knowledge level of clients regarding private markets according to the survey?

50% of clients have beginner-level knowledge, while only 4% have advanced knowledge of private markets.

What methods do advisors find helpful for improving client knowledge of private markets?

Advisors find education, thought leadership, and events helpful in improving client knowledge of private markets.