A strong growth of demand for real assets investments is expected over the five coming years, a number of private equity, real estate and infrastructure managers believe.
Some 340 managers have been surveyed by BNY Mellon, in collaboration with alternative data provider Preqin.
The research highlights 60% of infrastructure managers, 44% of real estate managers and 39% of private equity managers surveyed expect their assets under management to rise by at least 50% by 2020.
“Deep-rooted demographic and macro forces are driving an unprecedented need for investment in real assets such as transport facilities, communications networks, housing and hospitals.
“These demands far outstrip the reach of government and public finances, and this creates huge opportunities for private capital to play a part in people’s everyday lives,” said Alan Flanagan, global head of Private Equity and Real Estate Fund Services at BNY Mellon.
The survey shows almost half of the private equity and real estate fund managers interviewed believe that inflows will come from mass affluent and high net worth individuals in developing markets, sovereign wealth funds, and rising numbers of defined contribution schemes.
“Investors are turning more and more to real assets to find yield, diversify their portfolios, and steer through volatile markets,” Flanagan commented.
Also a third of real estate and 41% of infrastructure managers are seeing the most demand coming from public pension funds, followed by private sector pension funds.
Private equity managers see more interest from family offices (26%), followed by public pension funds (25%).
Among other trends the report puts a spotlight on remain that of transparency. Some two-thirds of fund managers across all asset classes believe regulation might lead to outsourcing in the future, highlighting cost as first reason to outsource.