(Mar 6): Investors have been turning to the private markets in search of opportunities and returns in this “lower for longer” interest rate environment. However, many of these investment vehicles are designed with the institutional investor in mind.

“The private markets are generally built for large institutional investors with a long-term investment horizon such as insurance companies, pension funds and sovereign wealth funds. These players can afford the huge minimum investment amounts and are able to tolerate the lengthy lock-up period,” says Choo Oi Yee, chief commercial officer at Singapore-based capital markets platform iSTOX.

The private markets are rapidly growing, she adds. According to the McKinsey Global Private Markets Review 2020 report released on Feb 1, the assets under management (AUM) of these markets had grown 170% or US$4 trillion ($5.6 trillion) in the past decade. The AUM rose 10% last year alone. The PE sector outperformed the public markets by most measures over the past decade, although the variability in performance remains substantial.

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