More than four-fifths (82%) of asset managers around the world introduced new private equity or private debt products over the past three years, according to "Navigating Change: Key Trends in Product Development & Management," a report released by Coalition Greenwich on Sept. 10.
Another 55% of asset managers have launched new products in other private alternative asset classes such as real estate, infrastructure, commodities, or hedge funds over that time period.
Asset managers expect to maintain a similar pace in the coming years, the report indicated. About 84% of managers plan to launch private market products, and 70% plan to launch new alternatives products, such as REITs, infrastructure, commodities and hedge funds, over the next three years.
In contrast, only about half of these asset managers have plans to bring in new active fixed-income products. Within active equities, “nearly a quarter of (asset) managers expect to launch new products, but almost another quarter expect to reduce the number of funds they offer,” the report noted.
In North America, Europe and Asia, pension funds, endowments and other institutional asset owners have been pouring assets into private markets, the report noted.
Currently, private equity assets account for about 11% of institutional portfolios in the U.S., with allocations to private debt representing some 4.3%. However, some large institutions have gone even further. For example, Coalition Greenwich noted that in March the board of the $510.6 billion California Public Employees' Retirement System, Sacramento, approved a plan to invest up to 40% of its $500 billion-plus portfolio in private assets.
“Institutional investors’ embrace of private assets is having a profound impact on the asset management business, and managers are re-making their product slates to meet the new demand,” said Mark Buckley, global head of investment management at Coalition Greenwich, in the report.
The report was based on feedback from 74 senior stakeholders at 68 asset management firms around the world and was conducted between May and June 2024.
Coalition Greenwich, a division of CRISIL, a unit of S&P Global, is a provider of strategic benchmarking, analytics and insights to the financial services industry.
