Aussie insto investors ‘seeking the niche’ in | Australian Markets

Private markets are set for a important injection over the subsequent 5 years as Australian institutional investors look to ‘seek out new niche opportunities’ in the face of market uncertainty, in response to the latest analysis from Nuveen.

The fifth-annual Equilibrium Global Institutional Investor Survey indicated that 75 per cent of Australian institutional investors deliberate to develop their allocations to personal markets over the subsequent 5 years, in comparison with simply 66 per cent of their world counterparts.

Similarly, 59 per cent of Australian investors responded that they have been actively growing their non-public credit allocations in “niche” alternatives, equivalent to NAV lending, esoteric asset-backed securities (music royalties, diamond receivables, litigation finance, airplane leasing) and vitality infrastructure credit. Only 47 per cent of world institutional investors prompt they have been doing the similar.

“Private credit opportunities remain strong globally, with a significant amount of both institutional and private wealth investors continuing to look offshore to complement their existing Australian private credit allocations,” Andrew Kleinig, Head of Australia at Nuveen, stated.

“According to Nuveen’s survey, area of interest non-public credit alternatives are additionally gaining momentum amongst Australian investors in areas equivalent to vitality infrastructure credit and fund finance, exhibiting larger demand in areas outdoors conventional non-public credit sectors.

“We are seeing strong interest from family offices, private wealth and high-net-worth individuals for private markets solutions as they seek solutions targeting diversification, low volatility, and strong and stable income.”

Over the subsequent two years, world investors stated they’re planning to principally increase their allocations in non-public infrastructure (50 per cent), non-public credit and personal equity (each 49 per cent). Australian investors carefully matched these preferences, with non-public infrastructure and personal equity in the joint first to have their allocations elevated, adopted by non-public credit.

The analysis additionally indicated that Australian investors appeared to have a more assured and “risk-on” strategy, with 69 per cent planning to increase their equity publicity (in comparison with 54 per cent of world investors) and solely 12 per cent aspiring to lower it (in comparison with 17 per cent globally).

“Nuveen, via our private credit specialists Churchill and Arcmont and rich heritage in broader private markets investment, has the scale and proven track record to provide what investors need across the breadth of the distribution spectrum,” Kleinig stated.

“At Nuveen, we’re focused on providing Australian investors with increased access to the benefits of private capital in local and overseas markets, through the launch of Nuveen’s various strategies including the CRE Debt Fund and Nuveen Churchill Private Credit Income Fund, giving investors an attractive opportunity to diversify portfolios whilst looking to achieve stable returns.”