Small investors are turning to private equity amid uncertainty in financial markets, says wealth manager Lu International
- Lu International’s Lu Global app offers private equity, other wealth management products to smaller investors
- The app reflects a move by the industry to provide more self-directed investing options to consumers
Uncertainty in global financial markets in recent months has pushed investors away from equities into fixed income and, in some cases, cash, according to Kit Wong, the chief executive of Singapore-based Lu International.
But it also has heightened interest by smaller investors in a surprising area: private equity products, Wong said.
“A lot of the money is sitting in yield-based products, [such as] fixed yield and stuff like that,” Wong said. “[There’s] a lot more interest in private equity. That’s also because private equity, being very long-term hold, takes away some of the short-term volatility that people are seeing in the market.
“That’s quite a big shift in profiles. Previously, it was either equities or fixed income. Now as equities has come down, fixed income has picked up. There’s a lot of demand for longer term private equity.”
Lu International operates the digital wealth management app Lu Global, which allows investors to direct their own investments in asset management products, ranging from traditional open-ended and close-ended funds to private equity. It is owned by Ping An Insurance-backed Lufax, one of China’s largest financial technology companies.
“While it is an app-driven, self-directed, investor-driven experience, the area we’re trying to move to is get more of the alternative products available at smaller ticket sizes for everyone,” Wong said. “It’s to give everyone a chance to try something different.”