Private Market Fund Returns: Optimism Grows
Fund Managers Bullish on Real Asset Returns
Private market fund managers are increasingly confident in strong returns from real assets over the next decade, coinciding with continued growth in assets under management within the sector.
Key Findings from Wealth Club Research:
* infrastructure Funds: Nearly 70% of fund managers predict annualised returns between 5-6%, with almost a third forecasting 6-7%.
* Real estate Funds: 68% anticipate annualised returns of 6-7%.
* Natural Resources Funds: Nearly 50% expect returns of 6-7%.
* AUM Growth: Over 50% of surveyed fund managers (managing £2.365 trillion) predict a compound annual growth rate of 14% for assets under management in the sector over the next five years. Only 6% expect less than this.
Reasons for Optimism:
Fund managers are drawn to real assets due to their ability to increase in value alongside inflation. These assets often contractually or directly pass on costs to consumers, providing investors with a stable, inflation-hedged income.
* Real Estate: Rising costs lead to higher rental income.
* Natural Resources: Essential to economic activity and retain value during inflation.
Source: City A.M. & Wealth Club research.