Wealthy investors in Asia-Pacific to spearhead bets in private markets to boost returns, BCG-iCapital report says

Name: China’s e-commerce and live-streaming booms are opportunities for private equity, Carlyle Group says
Uploaded: 2022-03-06T02:00:20.000Z
Duration: 10 min 19 s
Description: China’s e-commerce and live-streaming booms are opportunities for private equity, Carlyle Group says

High-net-worth individuals in the region are expected to boost their private investments by a compound rate of 26 per cent annually through 2025

Assets managed by high-net-worth investors in the sphere are likely to more than double by 2025 to US$1.2 trillion

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Iris OuyangandGeorgina Lee

Published: 10:00am, 6 Mar 2022

Wealthy investors in Asia-Pacific are expected to step up their investments in private markets over the next three years to bolster returns as a myriad of economic and geopolitical risks hobbled publicly traded assets.

Their bets in the sphere are expected to compound at 26 per cent annually through 2025, according to a study published by Boston Consulting Group and fintech company iCapital. That is faster than the 16 per cent forecast for North America and the 13 per cent seen happening in Europe.

“Our study underlines the size of the market opportunity for banks and wealth managers who expand access to private market investments for their clients,” said Anna Zakrzewski, managing director and partner at BCG. Tapping into alternative assets “can alleviate the margin pressures they are experiencing today,” she added.

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China’s e-commerce and live-streaming booms are opportunities for private equity, Carlyle Group says

Rich investors in Asia-Pacific will account for 37 per cent of the global investment among their peers by 2025, versus 27 per cent in 2020, according to the report. By that year, they will contribute to 10 per cent of capital raised by private equity funds globally, the report said.

Assets managed by rich individual investors in the private markets, which typically include equity in private companies, over-the-counter debt instruments and infrastructure and property holdings, are expected to more than double to US$1.2 trillion, it added.

In mainland China, there is an increasing number of international alternative managers setting up wholly foreign-owned enterprises (WFOEs) to attract onshore clients, said Nick Xiao, chief executive of Hywin International, part of Nasdaq-listed Hywin Wealth.