With institutional investors increasingly gravitating towards private markets, a recent Aviva Investors survey sheds light on their motivations.
A survey of 500 institutional investors finds recognition of the illiquidity premium often attached to these assets is gaining traction and now rising in importance.
The survey found 40% of investors see this as the main reason for a private market allocation, up from a quarter the year before. At the same time, 47% of investors expect the illiquidity premium to eventually become the key reason for allocating to private markets over the next two years, as it overtakes long-term and inflation-linked income as a motivation.
Investors' attraction to private market assets' illiquidity premium aligns with a growing expectation for better returns over the long term. Over one year, 46% of respondents believed private markets would outperform their public counterparts, with 27% expecting a similar performance between private and public markets.
Read more on investors' attitudes towards the illiquidity premium, the challenges associated with illiquidity, and expectations for private market performance in our content portal in association with Aviva Investors by completing form below.
