The Future of Private Market Investing Finds Broader Access, Secondary Market Activity and Increased Liquidity Key for Growth

Rhea-AI Summary

SEI (NASDAQ: SEIC) released a report highlighting the evolution of private markets and opportunities for investors. Conducted in partnership with Preqin and ANZU Research, the survey covered over 400 managers and investors, revealing a shift towards greater exposure to private assets. Key findings include rising retail access, with 80% of managers supporting non-accredited investments, and increased participation in secondary markets. As of June 30, 2021, SEI manages approximately $1.3 trillion in assets, indicating substantial growth potential fueled by broader access and enhanced liquidity for investors.

Positive

• Growing interest in private markets suggests increased investment opportunities.
• Survey indicates strong support for broader access to private assets, potentially boosting market participation.
• Increased secondary market participation, with half of GPs and LPs expected to engage in 2021.

Negative

• Over 90% of LPs feel that lack of transparency hampers wider acceptance of secondary markets.

OAKS, Pa., July 22, 2021 /PRNewswire/ -- SEI (NASDAQ: SEIC) today announced the results of a survey and report that explores the private markets' evolution and perspectives on inherent opportunities. "Private Market Liquidity: Illogical or Inspired?" is the result of SEI's strategic partnership with Preqin and ANZU Research to survey more than 400 managers (general partners or GPs) and investors (limited partners or LPs).   

"The potential for private markets is rapidly expanding as investors increasingly seek exposure to assets that have been off limits to them in the past," said Jay Cipriano, Senior Vice President and Managing Director of SEI's Investment Manager Services division. "Sparked by broader access and greater liquidity, the private markets are creating tremendous opportunities for managers and investors alike. Our survey provides critical insight into the shifting role of private markets, how retail is influencing their trajectory, and why the secondary market is essential to understanding the broader transformation."

Several emerging trends are attracting more investors and injecting additional liquidity into the private marketplace, including:     

Private Markets' Role

• In search of higher returns and superior portfolio diversification, institutional and retail investors are actively seeking greater exposure to private assets. In parallel, private assets' usefulness in portfolio construction has regulators lowering barriers and expanding access.
• GPs are twice as likely as LPs to say that private markets provide excellent portfolio diversification.
• The illiquidity premium is real, but it may continue to shrink as liquidity options multiply in coming years. In fact, investors surveyed are more likely than managers to argue that the premium is already shrinking.

Effect of Retail Access  

• Eight out of 10 GPs said that non-accredited individuals should be able to invest in private markets, giving way to widespread support for broader access to private securities.
• Mutual funds and ETFs will almost certainly play a key role in allowing mass affluent investors access to private markets either directly or via their advisors.
• 401(k)s and other retirement plans will include more private assets and private market strategies, initially packaged in collective investment trusts and/or embedded in target-date funds to gain market share.

Accelerating Secondary Market Participation

• Half of all GPs and LPs surveyed indicated they would participate in the secondary market in 2021, dramatically higher than our previous survey six years ago.  
• No longer stigmatized or viewed as a less reputable version of the primary market, secondaries are successfully being used to actively manage portfolios.
• A lack of transparency is preventing an even wider embrace of secondaries. More than 90% of LPs surveyed said more transparency was necessary.

"The growing alignment between GPs, LPs and regulators has driven improved private market access and increased liquidity," continued Cipriano. "To capitalize on this growth, GPs must address the myriad of operational challenges by building an ecosystem of technology vendors and service provider partners, taking advantage of the rising use of trading platforms and exchanges, and adapting to the portfolio turnover caused by LPs restructuring based on their ESG and diversity and inclusion values."

"Private Market Liquidity: Illogical or Inspired?" provides additional insight into the survey's findings. Download the complete report at: seic.com/PrivateMarkets 

About SEI
After 50 years in business, SEI (NASDAQ:SEIC) remains a leading global provider of investment processing, investment management, and investment operations solutions designed to help corporations, financial institutions, financial advisors, and ultra-high-net-worth families create and manage wealth. As of June 30, 2021, through its subsidiaries and partnerships in which the company has a significant interest, SEI manages, advises or administers approximately $1.3 trillion in hedge, private equity, mutual fund and pooled or separately managed assets, including approximately $399 billion in assets under management and $880 billion in client assets under administration. For more information, visit seic.com.

About SEI's Investment Manager Services Division
SEI's Investment Manager Services supplies investment organizations of all types with advanced operating infrastructure they must have to evolve and compete in a landscape of escalating business challenges. SEI's award-winning global operating platform provides investment managers and asset owners with customized and integrated capabilities across a wide range of investment vehicles, strategies and jurisdictions. Our services enable users to gain scale and efficiency, keep pace with marketplace demands, and run their businesses more strategically. SEI partners with more than 550 traditional and alternative asset managers, as well as sovereign wealth funds and family offices, representing more than $37 trillion in assets, including 49 of the top 100 asset managers worldwide*. For more information, visit seic.com/ims.

*Based on Pensions & Investments' "Largest Money Managers" 2020 ranking

Company Contact:	Media Contact:
Leslie Wojcik	Kerry Mullen
SEI	Vested
+1 610-676-4191	+1 201-674-4185
lwojcik@seic.com	kerry@fullyvested.com

 

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SOURCE SEI Investments Company

FAQ

What does SEIC's recent survey reveal about private market opportunities?

SEIC's survey indicates a significant shift towards greater exposure to private assets, especially among institutional and retail investors, reflecting an evolving private market landscape.

How has retail access impacted private market investments according to SEIC?

The survey found that 80% of general partners support non-accredited individuals investing in private markets, implying a trend towards broader accessibility.

What is the expected participation rate in the secondary market for SEIC in 2021?

Half of the surveyed general partners and limited partners indicated they would participate in the secondary market in 2021, a notable increase from previous years.

What challenges are highlighted in the SEIC report regarding secondary markets?

The report emphasizes that over 90% of limited partners believe more transparency is necessary to enhance acceptance and participation in secondary markets.