2020 brought profound change that will continue to influence financial markets for years to come. The covid-19 pandemic hampered economies and exacerbated market volatility, leaving investors to process the short- and longer-term impacts. Geopolitical tensions and growth in anti-globalist policies are also creating structural changes which investors must factor into their investment strategies. Despite increasing risks, however, investors are confident that private-market assets will continue to offer opportunities for long-term growth.
This report explores the long-term trends shaping private-market investors decisions and the strategies managers are deploying to continue generating returns despite growing global risks. The research is based on in-depth qualitative interviews and desk research, and a survey covering 110 limited partners (LPs)—specifically, investors that commit capital to private markets, including pension funds, institutional accounts, and investment and portfolio managers—in Asia, Europe and North America. The key findings from the survey include:
-
Eighty percent of respondents agree that private markets are less susceptible to short-term volatility than public markets.
-
Eighty-five percent of respondents expect private markets to continue to outperform public markets in the long term.
-
Respondents expect Asia-Pacific to offer the best private-market investment opportunities in 2021, followed by North America.
-
Respondents expect the financial services, technology and healthcare sectors to offer the best private-market investment opportunities in 2021.
-
Respondents plan to invest in companies with multiple growth strategies, and in funds with experienced general partners for risk mitigation.
-
Respondents anticipate that the following risk scenarios will have the greatest impact on their private-market investment strategies in 2021: the continued spread of covid-19 and vaccine distribution issues; and growth in anti-globalist policies, such as trade barriers and tariffs.
