Aussies feeling FOMO on private markets: Survey

Investors are afraid of missing out on opportunities in private markets, but many are hesitant about the asset class for one reason.

Natixis Investment Managers' survey of over 7000 investors around the world found that a third (32%) of Australian investors are fearing missing out on opportunities when it comes to private asset investments.

Despite the sentiment, many haven't been able to pull the trigger as more than half (56%) lack clear understanding of the framework around private assets.

Further, Australians have a lower rate (58%) of understanding of the private market compared to 65% globally.

With seven in 10 (72%) expecting market volatility to continue, coupled with the opacity of private markets, most Australians are selecting safety over performance (80%).

Natixis also revealed that 68% said "they don't want to be locked into only what overall markets can deliver for returns", as they turn towards active investment strategies.

"Selecting a manager with deep local knowledge in the market they are investing, as well as a track record of delivering value through many market cycles is essential," Natixis country head Australia and New Zealand Louise Watson said.

"Education becomes essential as some knowledge gaps remain. Liquidity, the valuation lag, and the return cycle are the top three differences between public and private markets that investors must know."

While there are alternative investment options such as evergreen funds, which are traditionally more accessible than those with the closed ended structures, liquidity and valuation issues can persist.

"I look forward to seeing how access to private assets improves for individual investors as platforms build the technology to deal with lower liquidity and less frequent valuations, and investment managers create more evergreen funds," Watson said.

It comes as the industry urged ASIC to ramp up scrutiny on private markets following its discussion paper on the dynamics between public and private markets, particularly on the private credit sector "due to its opacity rapid growth, and untested status in a downturn."