State Street Private Markets Survey Finds Macro Challenges Not Dampening Demand; Public To Private Shift Set To Grow Further - Seite 2

“Overall, while demand for private market assets continues to grow, investors are also experiencing a tightening supply of quality deals and express that borrowing costs can be an issue for them,” said Scott Carpenter, global head of Private Markets & Credit at State Street. “Central bank decisions on rates and the state of inflation will heavily influence opportunities and investing behaviors over the next couple of years.”

AI-enabled technological innovation is core to institutional investors’ private markets outlook

Risk measurement and management, liquidity management, and the ability to forecast future and capital pacing are among the top operational challenges institutions face when investing in private markets. Almost 80% of investors are looking for a centralized, accessible platform for public and private asset data, as the current lack of availability, accuracy, and timeliness of data is an overlooked aspect of private markets.

However, the recent advancements in AI have the potential to improve private markets operations significantly. Nearly half of respondents (43%) globally believe that machine learning has the potential to enhance private markets operations, while more than half (58%) believe that generative AI will enhance operations.

“AI excitement from institutional investors is driven by the industry’s historic deficiencies in quality private market data,” added Milrod. “Subpar access to quality data is a major impediment that stands in the way of a firm’s ability to view and assess public and private assets data in one place. As we speak with clients, it is clear AI has the potential to hugely improve this aspect of the market.”

Improvements through legislation key to driving increased retail participation

Institutions surveyed remain skeptical about prospects for increased retail investment in private markets, but see potential for legislation to open options and drive flows. More than half of respondents (54%) believe current investment products do not make the asset classes suitable for retail investors, while around half (49%) believe there is strong demand for access to private markets among retail or DC investors.

Please click here for the full report: 2024 Private Markets Outlook: From headwinds to tailwinds.

1 The study, commissioned by State Street and conducted by CoreData Research, surveyed 480 respondents from traditional asset managers, private market managers, insurance companies and asset owners across four regions, North America, Latin America, Europe and Asia Pacific in September to November 2023.