Preqin Expects Global Alternative Markets To Surpass US$30 Trillion By 2030

KUALA LUMPUR, Sept 23 (Bernama) -- Preqin in its Future of Alternatives 2029 report forecasted the global alternatives industry to reach US$29.2 trillion in assets under management (AUM) by 2029, from US$16.8 trillion at the end of 2023. (US$1=RM4.20)

In a statement, the company said while not part of the official report forecasts, the analysis predicted the industry is on course to exceed US$30 trillion in AUM by 2030.

This signifies an annualised growth rate of 9.7 per cent in the forecast period, 2023-end to 2029, which represents a slowdown from 10.5 per cent during the 2017 to 2023 period due to softer expectations for the private equity and venture capital markets.

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Preqin Global Head of Research Insights, Cameron Joyce said global alternatives markets continue to evolve rapidly, especially as individual investors’ access opens up, as the private wealth channel’s growth continues to gather pace.

Private wealth and weak exit markets are expected to drive secondaries to an annualised growth rate of 13.1 per cent, with secondaries forecast to be the fastest growing area of alternatives from 2023-end to 2029.

Currently, the secondaries market remains a buyer’s market, as investors’ portfolios face liquidity constraints, and Preqin anticipates ongoing demand for secondaries strategies from the private wealth channel, as they offer inherent advantages for investors that are new to private markets.

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Meanwhile, private equity is predicted to remain the largest private capital asset class, with Preqin forecasting it is on course to more than double in AUM from 2023-end to 2029, from US$5.8 trillion to US$12.0 trillion, at an annualised growth rate of 12.8 per cent.

The report also found that artificial intelligence (AI) is expected to be one of the factors buoying early-stage venture capital with annualised AUM growth at 13.2 per cent, followed by venture (general) at 11.1 per cent, from end-2023 to 2029.

By 2029, global private real estate AUM is forecast to continue its steady growth to US$2.7 trillion; global unlisted infrastructure AUM to reach US$2.4 trillion as the energy transition lifts fundraising and deals from 2027 onwards; and global hedge funds AUM to surpass US$5.7 trillion but outflows are predicted to impact performance-based growth.

The Future of Alternatives report series forecasts the size and growth of the global alternatives industry based on Preqin’s Research Insights team’s data-driven predictive models and analysis, as well as covers all alternative asset classes, including by strategy, across major global regions.

-- BERNAMA