Nearly One-Third of Advisors Plan to Allocate 20% or More of Client Portfolios to Private Markets in 2025, Hamilton Lane Private Wealth Survey Finds

Rhea-AI Summary

Hamilton Lane's recent survey reveals a significant shift in private market investment trends, with 30% of investment advisors planning to allocate 20% or more to private markets in 2025, and another 29% planning 10%+ allocations. This represents a 15% increase from 2024.

Private infrastructure shows particular promise, with 48% of respondents planning to increase exposure, attracted by features like high barriers to entry, durable cash flows, and portfolio diversification. Private equity and credit remain top allocation choices.

The survey highlights that 76% of respondents view private markets as offering higher rewards compared to traditional investments, primarily driven by performance and diversification benefits. While 63% of advisors rate their private markets knowledge as 'advanced' (up from 55% last year), a knowledge gap persists.

Interest varies by generation, with highest engagement from Gen X (94%) and Millennials (89%). Geographically, Asia Pacific (51%) and the Americas (48%) show the strongest interest in private market investments.

• Annual global report, surveying more than 300 investment advisors, finds diversification and performance continue to drive private wealth interest in the asset class
• Private infrastructure is poised to gain market share, with 48% of those surveyed planning to increase exposure in that sector
• Despite interest, many investors have only "beginner" knowledge of the asset class, highlighting importance of ongoing education as well as opportunity to deepen client relationships 

CONSHOHOCKEN, Pa., Jan. 29, 2025 /PRNewswire/ -- Private market allocations are rapidly becoming a significant portion of advisors' book of business, according to a recent survey of investment advisors conducted by global private markets investment management firm Hamilton Lane (Nasdaq: HLNE). In fact, nearly one-third (30%) of survey respondents report they plan to allocate 20% or more to the asset class. Another 29% plan to allocate 10% or more, meaning that a total of nearly 60% of the financial professionals surveyed plan to allocate 10% or more to private market investments in 2025. This is a 15% increase from the firm's 2024 survey and marks a notable shift in comfort with the asset class and growing interest among individual investors.

Interest in infrastructure investing

Private infrastructure is poised to gain market share according to the survey, with 48% of respondents planning to increase exposure in that sector. This finding affirms a broader trend of growing investor interest in private infrastructure as the benefits become more widely understood, including: high barriers to entry, durable cash flows, competitive total returns, income yield and portfolio diversification. While infrastructure saw the biggest uptick in interest, private equity and private credit followed closely behind, with those strategies currently in the top two spots in terms of overall portfolio allocation.

Attractiveness of private markets

More than three-fourths (76%) of respondents said their clients see private markets as providing higher reward compared to stocks and bonds. Why? Performance and diversification. When asked why clients are interested in private markets, the results this year were almost identical to last year's survey, with these two factors cited most frequently, significantly outpacing other responses (sector exposure, liquidity or "other").

Increased acumen but knowledge gap persists

Despite increased acumen on the part of advisors, with 63% rating their knowledge of the asset class as "advanced" (compared to 55% in last year's survey), for the remainder of the respondent base there is still a knowledge gap. Hamilton Lane offers resources such as the Knowledge Center and Chart of the Week to help advisors and clients develop private markets acumen to further their investment objectives. 

Other key findings

• One key reason advisors offer private market investments is to have a competitive edge when attracting and retaining clients, with 70% of advisors reporting that helping clients invest in private markets deepens those relationships.
• While all age groups show an interest in private market exposure, interest is highest among Gen Xers (94%), Millennials (89%) and Baby Boomers (77%). Following were Gen Z (59%) and those aged 75+ (43%).
• Globally, Asia Pacific (51%) and the Americas (48%) reported the highest percentage of clients who are "very interested" in the asset class. Unsurprisingly, knowledge of the private markets correlated with interest, with those regions topping the number of those who described their knowledge as either "advanced" or "intermediate." 

Steve Brennan, Head of Private Wealth Solutions at Hamilton Lane, commented: "This year, our survey results showed a growing enthusiasm around and appreciation for the diversification and performance benefits the private markets can provide. Just a few years ago, we would never have expected to see nearly 60% of advisors planning to allocate 10% or more of clients' portfolios to this asset class in the coming year. To us, this reinforces the growing understanding of the wealth creation opportunities within the private markets.

"As we look ahead, we expect interest in the infrastructure space to continue to grow, and hope to see investors who describe their knowledge of the private markets as 'advanced' tick up even further. At Hamilton Lane, we continue to be focused on bringing high-quality private markets investment opportunities to advisors and their clients while expanding investor access and knowledge of this asset class."

For more information on Hamilton Lane's Private Wealth business, click here. To view the full report and findings, click here.  

Survey Methodology 

The online survey was conducted from October 29 to December 4, 2024. The 320 global respondents included private wealth firms, RIAs, family offices and other advisor professionals from APAC, Canada, EMEA, LatAm, the Middle East and the U.S.  

About Hamilton Lane

Hamilton Lane 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 730 professionals operating in offices throughout North America, Europe, Asia Pacific and the Middle East. Hamilton Lane has more than $947 billion in assets under management and supervision, composed of more than $131 billion in discretionary assets and approximately $816 billion in non-discretionary assets, as of September 30, 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 www.hamiltonlane.com.

 

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SOURCE Hamilton Lane

FAQ

What percentage of advisors plan to allocate to private markets in 2025 according to Hamilton Lane (HLNE)?

According to the survey, 30% of advisors plan to allocate 20% or more to private markets, while an additional 29% plan to allocate 10% or more, totaling nearly 60% of advisors planning significant private market allocations in 2025.

How much has advisor interest in private markets increased from 2024 to 2025?

The survey indicates a 15% increase in advisors planning to allocate 10% or more to private markets compared to the 2024 survey.

What percentage of advisors are planning to increase exposure to private infrastructure in 2025?

48% of survey respondents indicated plans to increase their exposure to private infrastructure investments in 2025.

Which generations show the highest interest in private market investments according to HLNE's survey?

Gen X shows the highest interest at 94%, followed by Millennials at 89%, and Baby Boomers at 77%. Gen Z shows 59% interest, while those aged 75+ show 43% interest.

Which regions show the strongest interest in private market investments?

Asia Pacific (51%) and the Americas (48%) reported the highest percentage of clients who are 'very interested' in private market investments.

What percentage of advisors say private markets knowledge helps deepen client relationships?

70% of advisors report that helping clients invest in private markets deepens their client relationships.