Farid Moeinifar’s Post

Great post by Farid highlighting the absence of UK advisers in private markets. I speak with dozens of financial advisers and wealth managers about this very topic and find the reasons fascinating. Some of the niche structural problems in the UK preventing advisers stem from... ...over-regulation: the FCA categorises private funds as high risk Non-Mainstream Pooled Investments (NMPI), which lowers the risk tolerance for many regulated financial services businesses, like wealth managers and personal pension (SIPP) administrators. Fundamentally, is a diversified portfolio of early stage businesses managed by an established venture capital fund really riskier than a single stock traded on the AIM? Or is a UK domiciled closed-ended senior secured private credit fund really riskier than an open-ended hedge fund domiciled in the Cayman investing in esoteric financial instruments? PI Insurance: largely stemming from the above, many insurers either won't include private assets within the scope of permitted advice for financial advisers, or they price the coverage so high that it is uneconomical for financial advisers to pay for coverage. Financial incentivises - or lack of: if the organisation you work for says you can't advise on this stuff and your PI Insurance coverage wont extend to private markets, how can advisers book private assets and earn fees on them? As we were talking with Chris Tottman of Notion Capital yesterday, these kind of obstacles are hindering UK growth and only serve to widen long term wealth inequality. Advisers want in, their clients do too, so something has to give there. Will politicians act and pressure the regulators for change?

Interesting debate. Providing access to private markets is a win win in view of portfolio diversification for the investor and channeling more capital into VC and early stage companies, leading to a more vibrant startup environment and innovation in the economy. #Mara #privatemarkets #VC #VCfunds #Portfoliodiversification #earlystage #startup #innovation

Interesting point made by Farid. Providing access to private markets is a win win in view of portfolio diversification for the investor and channeling more capital into VC Funds and early stage companies, leading to a more vibrant startup environment and innovation in the economy. #Mara #privatemarkets #SPV #feederfunds #VC #VCfunds #Portfoliodiversification #earlystage #startup #innovation

According to a recent survey from NextWealth, only 2% of UK-advised client assets are invested in private markets, compared to 15% globally. Two out of three UK advisers don’t even raise the topic of private markets with their clients. Why? Lack of liquidity and platform accessibility are two reasons. This despite research from industry consultant Cambridge Associates showing that private equity has outperformed public equity by up to 6% per year over multiple timeframes. Research from many others also support the outperformance of private versus public equity. Why would investors be willing to forego so much additional potential return? If genuine private markets were available and accessible in a reasonably liquid format, wouldn't you want to consider an investment in private markets for your portfolio? Kinson Lo, Felipe Massu, Luke Dixon, CFA, CAIA, Christine Tsai, Aman Verjee, CFA, Stephanie M. Shorter, PhD, James Burron, CAIA, Andrew Sams, Philip B. Wei, Davide de Picciotto #privatewealth #familyoffices #privateequity #privatemarkets https://lnkd.in/ehUqrVYf

There are some major barriers keeping UK advisers from investing in private markets, including compliance concerns and platform availability, a new study has found. Only 2% of UK-advised client assets are invested in private markets, compared to 15% globally, NextWealth found. The research and consultancy firm was commissioned by Schroders Capital, Franklin Templeton and Aviva Investors to understand why advisers in the UK are reticent to include private market assets in their client portfolios. Read more here: https://bit.ly/48RqOe0 #UKAdvisers #PrivateMarkets #Investing

"Small caps aren’t necessarily riskier than their larger counterparts."   While smaller companies are usually thought of as more volatile and therefore riskier than larger, more established businesses, there are exceptions to the rule. Trustnet highlight the eleven funds in the IA UK Smaller Companies sector that are less risky than the FTSE 100 Index including both the WS Gresham House UK Smaller Companies and WS Gresham House UK Micro Cap funds. FE fundinfo investments analysts emphasised the “thorough” research process and the “extensive network of industry specialists and brokers” around Ken Wotton and Brendan Gulston, whose process combines private equity elements with an emphasis on protecting capital and achieving long-term growth. Read more here: https://lnkd.in/ePrKVq9U #ukequities #uksmallcaps | Capital at risk. Not an investment recommendation. Cassie Herlihy David Bickerstaffe George Karidis

For professional investors. Private markets are evolving – innovation in structuring combined with regulatory changes are progressively opening up access to private markets for private investors. For investors seeking to enter private markets, Schroders Capital, in association with Citywire, is debunking the common myths. Part three addresses illiquidity risk, considered in the wider risk/return spectrum present in both public and private markets. It also shows how new, longer-term structures for investing in private markets could help to reduce overall portfolio volatility. This is sponsored content. https://ow.ly/GZaS50S8hXA

Interesting piece by Institutional Investor's Michael Thrasher on the state of private markets. According to new research, private market assets under management are expected to grow at more than twice the rate of public assets and reach $60 to $65 trillion by 2032. With this rapid growth, the need for robust private markets administration solutions, like those offered by SS&C, becomes increasingly critical to support the complexities and demands of these expanding investments. https://lnkd.in/eqY2kQzh

From a room with a view, UK private investors highlight what influences their decision when looking to invest. (Although I'd say it's probably not to dissimilar round the globe) Performance will always be a factor, but what else can asset managers/investment firms do to support these decisions amongst the plethora of information, that also needs to conform with the consumer duty directive, get it wrong, well… but get it right. #marketresearch #salesandmarketing #privateinvestor #assetmanagement #consumerduty

Did you know that a significant number of private wealth advisors are already incorporating private markets into their own client portfolios? Hamilton Lane conducted a global survey of private wealth managers to gauge their interest in private market investments. The findings were clear with over 70% intend to increase their allocations to private markets. Read the full survey: https://lnkd.in/eAAfV-6T #privatewealth #privatemarkets