Funding through existing brokerage accounts is most common option
Investors are staying positive on the potential of private markets investments, with most planning to maintain or increase their allocations.
A survey of nearly 400 US individual investors and industry experts by investment platform Yieldstreet, reveals that diversification is the top reason for allocating to private markets with almost two thirds of respondents with at least US$1 million in investable assets citing this, followed by higher yield generation (53%) and reduced correlation with public markets (27%).
Nearly one-third of investment advisors plan to allocate 20% or more of their clients’ portfolios to private markets in 2025, according to the recent Hamilton Lane’s Private Wealth Survey.
Yieldstreet found that brokerage accounts are typically the primary funding source for private market investments (59%) followed by savings and checking accounts (41%).
“As financial firms rush to bring private markets to self-directed affluent retail investors, we wanted to challenge common assumptions about this audience — including our own," said Michael Weisz, Founder and CEO of Yieldstreet. “What we found is that when provided access to private markets, investors are actively diversifying between their public and private market accounts to make sophisticated investment decisions across asset classes. The platforms that succeed will be those that deliver the intuitive, digital experience investors have come to expect, paired with institutional-caliber opportunities – enabling them to build diversified portfolios over time.”
Schroder’s 2024 Global Investor Insights Survey revealed an increased interest in private markets as institutional investors examine central bank policies, interest rates, and the potential for an economic downturn while strategizing for their portfolios over the next 12 months.
