BT and Preqin respond to adviser demand for private markets
BT and Preqin have teamed up to provide financial advisers with greater education and transparency on private markets.
The wealth management platform has announced a strategic educational partnership with alternative markets data provider, Preqin, which was acquired by BlackRock last month for US$3.2 billion ($4.8 billion).
BT’s partnership with Preqin will offer comprehensive resources and up-to-date research on private markets to enhance advisers’ understanding of the sector. Curated by Preqin’s analysts and researchers, the materials cover private equity, private debt, infrastructure, property and natural resources.
Moreover, advisers who use BT’s platforms will be able to access certain reports from Preqin, including historical performance data and analysis on asset classes and macroeconomic factors.
The announcement is in response to the rising adviser demand for private market investments, the two firms stated. According to Preqin research, assets under management in private markets have tripled in Australia over the past decade, hitting $139 billion in December 2023.
Private markets across the globe have seen even further growth, underpinned by structural changes in global capital markets. This includes fewer listed companies, reduced IPOs and stricter post-GFC regulations, leading to more private lenders entering the market.
Research by private market investment firm Hamilton Lane recently discovered that 92 per cent of advisers currently allocate client capital to private markets. Some 70 per cent of advisers are seeking to increase clients’ allocation to private markets compared to 2023, with performance and diversification being cited as the top drivers for the surge in demand.
Despite the growth of the sector and its subsequent demand from advisers, comprehensive market research remains scarce, BT stated.
“Private markets were once considered the domain of institutional asset owners, but new products are increasingly available to private wealth investors. Once considered ‘alternatives’, we can see a time – as portfolios evolve – when private debt will be an extension of fixed income, real assets as an extension of listed property and infrastructure, and private equity as an extension of shares,” commented Stuart Cadzow, BT head of investment product solutions.
With advisers seeking additional education on this traditionally opaque sector, it is clear that private markets are not as well understood as listed assets, Cadzow said.
“It’s crucial that advisers understand the role these sub-asset classes play in their clients’ portfolios, including product features which can impact performance, liquidity and fees.”
Money Management recently explored why some industry experts are concerned about the sudden boom in private credit fund launches. Louis Christopher, managing director at SQM Research, raised concerns about “fly by night” managers setting up these funds and cautioned advisers to be wary when it comes to their fund selection.
Cadzow added: “We have the necessary reach to make an impact and improve access to information that advisers need. We identified a clear education gap in the private markets space, and so have sought to empower advisers with market leading research and education, so they can help clients make better strategic investment decisions.
“Our partnership with Preqin is the first step in BT’s commitment to supporting advisers with private market education and product access. BT sees the sector as an increasingly relevant part of clients’ portfolio construction going forward.”
AUTHOR
Jasmine Siljic
Recommended for you
Sequoia Financial Group has declined by five financial advisers in the past week, four of whom have opened up a new AFSL, according to Wealth Data.
Insignia Financial chief executive Scott Hartley has detailed whether the firm will be selecting an exclusive bidder for the second phase of due diligence as it awaits revised bids from three private equity players.
Insignia Financial has reported a statutory net loss after tax of $17 million in its first half results, although the firm has noted cost optimisation means this is an improvement from a $50 million loss last year.
With alternative funds being described as “impossible” for fund managers to target towards advisers without the support of BDMs for education, Money Management explores the evolving nature of the distribution role.
