This Is the Investment of the Year, According to Fund Managers

As increasing interest rates and inflation concerns stay top of mind, wealthy individuals are betting big on private equity.

Wealthy investors may beat out institutions in private equity allocation growth

According to a recent WSJ article, private fund managers are reporting significant allocation increases to private equity among high-net-worth (HNW) investors over the last year. And the trend is only expected to continue upward.

In fact, HNW individuals may even beat out institutional growth in the private equity race.

According to data from Boston Consulting Group and iCapital, by 2025, the HNW are expected to rack up a compound annual growth rate of 19% and hold more than 10% of capital raised by private equity firms.

Private equity and private credit vs. public markets

How does it compare to the public markets, though?

The below data from Hamilton Lane outlines the pooled average buyout returns of private equity and private credit performance vs. the public markets over the last 20 years.

Your role as an advisor

As more investors are shifting interest to private funds, the pressure is on for advisors to meet the demand.

In fact, we've spent countless hours over the least few months talking to both advisors and high-net-worth investors about what they're really looking for. The verdict: Advisors want to offer a family office-like experiences for their clients, and clients want a family office-like experience from their advisors.

If you're an advisor or self-advised investor allocating to private equity now or in the near future, let's talk.