Alternatives are set to become “truly global” as allocations by Asian investors increase.
A study by data provider Preqin found there will be a “levelling of the world’s alternatives markets” in the next five years as allocations from Asia and emerging economies outpace North America and Europe.
Preqin forecasts that assets in alternatives will surge to over $17 trillion (€14.3 trillion) by 2025 – a compound annual growth rate of nearly 10%.
The report also highlighted that assets in private equity – already the largest asset class with $4.42 trillion in assets – are expected to double over the same period.
Various megatrends such as ESG, ‘big data’ and digital transformation, are also predicted to transform the alternatives sector, according to the report.
Dave Lowery, head of research insights at Preqin, said: “It is a truth long-since acknowledged that investors are progressively making alternative assets a mainstay of their portfolios.
“But as they become more sophisticated, so do their demands: closer relationships with fund managers; product innovation; and improvements in reporting, transparency, and ESG standards.”
Over 80% of investors in a survey say they will likely increase investment in the alternatives sector.
Nearly 100 investors and 146 fund managers took part in the survey.
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