Wealthy Asian investments are pouring into hedge funds and private equity

Dec 27, 2021

Demand for alternative investments from private banking clients has historically been mostly from ultra-high net worth individuals who are familiar with private equity. This trend now extends to HNWIs and wealthy investors, especially those from Asia.

Historically, most of the demand for alternative investments by private banking clients has come from ultra-high net worth individuals who are intimately familiar with private equity.

The trend now extends to high net worth individuals and wealthy investors, who have raised more than $1.5 billion from clients for their private equity funds over the past few years, with "strong and growing" investment demand from Asia Pacific

JPMorgan also said demand from high-net-worth clients to invest in hedge funds has grown several times, and interest in private placements has nearly doubled.

Asian clients have moved money from "directional" hedge funds, which typically offer higher returns but are more volatile, to multi-strategy, more diversified hedge funds that have returned around 8-12%.

HSBC data also shows that in 2020, $2.3 billion was raised from investors around the world for alternative investments, of which Asia accounted for $1.34 billion

A report by real estate consultancy Knight Frank also pointed out that Asia's ultra-high net worth individuals (personal net worth over US$30 million) have seen the largest increase in the world.

The Asian region is expected to account for 24% of the world's ultra-high net worth individuals by 2025, up from 17% a decade ago.