A new report from IQ-EQ, Nomura and Barton Consulting assessing the private capital landscape found that 61% of private capital investors view private equity positively due to its high return potential and variety of opportunities in the space, with real estate offering the most attractive risk/return ratio.
The study surveyed a range of private capital investors – from professionals working within family offices or financial institutions to private (ultra) high net-worth (UHNW) individuals – about their views on the private capital landscape, including areas of interest, trades of focus and key challenges.
Key findings include:
- Confidence in the immediate future for the private capital industry is solid. A slim majority of respondents (52%) were very or extremely confident, while more than a third (36%) exhibited more lukewarm sentiment. Just over one in ten investors (12%) were not really confident at all
- Both professional and non-professional investors viewed most sectors within the private capital industry positively, with approving views on fair pricing and firm return expectations. Overall positivity was highest for real estate (71%)
- Asia was the most exciting region for future opportunities, leading North America and Western Europe, but the U.S. was deemed as the favoured jurisdiction for private investment holding structures by 31% of respondents
- Industry wise, biotechnology and IT were the most exciting industries for private capital investment ranking as the most exciting industries, above financial services, land and real estate, and renewable energy following
- Direct investing and direct co-investing were the preferred types of investment, with 56% and 23% of investors preferring these methods
- Less than half (46%) of private capital investors surveyed were fully satisfied with the level of multi-asset class reporting
- ESG is one of the most talked-about and growing concepts in the private capital investment world. Just under a third (29%) of those surveyed claim that ESG principles have a major role for them in investments. The vast majority (85%) of investors have made ESG even more of a focus in the last 12-18 months
Commenting on the results, Steve Sokic, Group Head of Private Wealth at IQ-EQ, said:
“Global investment into private assets is growing exponentially. As a partner to many of the world’s leading investors, IQ-EQ has had a front row seat to the convergence of both private and institutional players into the private capital space, as has Nomura and Barton Consulting. We teamed up to get an even better look into the specifics of this surge, which is showing no signs of slowing.”
Guy Hayward-Cole, Managing Director, Head of Advisory EMEA , Nomura added:
“This report reveals some very exciting trends shaping the future of private capital. There is an increasingly sophisticated ecosystem of wealthy private investors, family offices, major institutions and fund managers driving demand in private capital investments.”
The survey was made up of a quantitative global audience of private capital investors, both private HNW individuals with a minimum net worth of $15 million and professional investors across North America (27%), Asia-Pacific (40%) and Europe (33%).
The report was officially launched at IQ-EQ’s annual conference, Crossroads. The theme of this year’s conference is ‘The rise and rise of private capital’.