Numis research reveals investors plan to significantly increase exposure to Private Markets.
LONDON – 2 December 2021: New research from Numis, the independent investment bank (AIM:NUM), has revealed that 71% of institutional investors worldwide intend to increase their exposure to private capital markets – including private equity and venture capital – in the next five years.
However, over the initial next three years, it is the growth capital end of the market that is set to receive the biggest increase, with 73% stating they will increase their allocation and invest in high growth private companies.
Numis’ research surveyed 200 institutional investors with a combined AUM of $4.5 trillion revealed that more are increasing their total allocation to private markets across the board. Currently, 38% have 10% or more of their funds in private markets, but that figure is set to rise to nearly half (45%) by 2030. Currently, 67.5% of institutional investors have 5% or more of their assets allocated to private capital, but that figure is also is set to rise to 75% by 2030 – demonstrating a rapidly expanding market.
When asked why they are increasing their focus on growth capital, 65% of institutional investors said it was because they have greater comfort in investing in illiquid, longer-term assets; while 61% said it was because attractive companies are remaining private for longer.
“Disruptive, high-growth private companies are reshaping consumer experiences and business processes and because of this they represent some of the most exciting investment opportunities around today. Private market investment has grown six-fold in the last decade, and the number of $1bn+ ‘unicorns’ has increased ten-fold.
Given this environment, it is perhaps not surprising to see institutional investors so positive about private capital markets, and that many plan to increase their allocation to this sector.”
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