Key Takeaways
- • UBS Asia-Pacific chief Iqbal Khan says high-net-worth clients are seeking more alternative assets to spread risk amid volatile markets, with "continued demand" for alternatives, per Bloomberg.
- • Bain & Co's 2023 report found ultra-HNW investors and family offices with more than $30 million in assets have 22% invested in alternatives, versus 3% for the $5-30 million cohort and 0.7% for the $1-5 million cohort.
- • A January BNY report found fewer than 3% of HNW portfolios hold alternatives, with BNY projecting private wealth allocations could rise from $4 trillion to $12 trillion over the next 10 years.
- • Khan said alternatives penetration remains low relative to total wealth portfolios, indicating "some way to go" in diversification.
- • Large private markets managers including Carlyle, Blackstone and KKR have built private wealth arms targeting HNW and UHNW individuals and family offices.
Summary
UBS clients with high net worth want to buy more alternative assets and spread risk amid volatile markets, according to Iqbal Khan, the Swiss bank's Asia-Pacific chief. Speaking to Bloomberg in Hong Kong at the UBS Asian Investment Conference, Khan said, "We see continued demand" for alternatives. The term spans private equity, private credit, infrastructure, commodities, real estate and hedge funds, although there is debate over whether hedge funds properly belong in the category.
Khan said alternatives have grown significantly within client portfolios but remain a small share of aggregate wealth holdings. "So, there is probably some way to go in terms of diversification into alts," he said. Khan, who relocated to Hong Kong last year and is also co-president for global wealth management, reportedly expects lower interest rates and continues to see the potential for stagflation.
A 2023 Bain & Co report found that ultra-HNW investors and family offices with more than $30 million in assets already have 22% of their portfolios in alternatives. Investors with $5 million to $30 million allocate 3% on average, while those with $1 million to $5 million allocate just 0.7%.
A January BNY survey of US investors found that less than 3% of HNW portfolios hold alternative assets. It projected that private wealthy investors would increase alternative holdings from $4 trillion to $12 trillion over the next 10 years.
The push comes as large private markets firms, including Carlyle, Blackstone and KKR, have built private wealth arms, viewing HNW and UHNW individuals and family offices as important sources of growth.
Khan said alternatives have grown significantly within client portfolios but remain a small share of aggregate wealth holdings. "So, there is probably some way to go in terms of diversification into alts," he said. Khan, who relocated to Hong Kong last year and is also co-president for global wealth management, reportedly expects lower interest rates and continues to see the potential for stagflation.
A 2023 Bain & Co report found that ultra-HNW investors and family offices with more than $30 million in assets already have 22% of their portfolios in alternatives. Investors with $5 million to $30 million allocate 3% on average, while those with $1 million to $5 million allocate just 0.7%.
A January BNY survey of US investors found that less than 3% of HNW portfolios hold alternative assets. It projected that private wealthy investors would increase alternative holdings from $4 trillion to $12 trillion over the next 10 years.
The push comes as large private markets firms, including Carlyle, Blackstone and KKR, have built private wealth arms, viewing HNW and UHNW individuals and family offices as important sources of growth.
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