In recent years, the investment landscape has seen a shift towards the 'democratisation' of private markets, giving retail investors access to previously exclusive asset classes.
These private assets, ranging from real estate and infrastructure to private equity and debt, have become more accessible through investment trusts and multi-asset funds, offering opportunities for diversification and potential inflation protection.
As long-term asset funds begin to establish a framework for private market investments in the UK, new channels are opening up for those seeking to diversify their portfolios beyond traditional equities and bonds.
However, allocating private assets within a multi-asset portfolio is complex, requiring careful consideration of risk, liquidity, and returns. Retail investors face challenges in understanding these assets, with liquidity concerns and management fees influencing decisions.
Despite this, many large investors are optimistic, increasing their allocations to private assets for their potential to provide stable returns, even during market volatility.
As the regulatory landscape evolves, so too will the structures and accessibility of private market options, making it an intriguing area for advisers and investors alike to watch closely.
Ima Jackson-Obot is deputy features editor at FT Adviser
