Appetite for investments in real assets among retail and institutional investors will surge by 2020, according to research by BNY Mellon prepared in association with Preqin.
The report says that the investment will be driven by mass affluent and high-net- worth (HNW) individuals in developing markets, continued expansion of sovereign wealth funds, and increasing numbers of defined contribution schemes.
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As of now, institutional investors have the biggest appetite for real investments, with most of alternative investment managers saying that institutional investor appetite for real assets have grown over the last one year.
However, almost half of the private equity and real estate fund managers said that retail investors will become a significant source of capital by 2020.
About 60% of infrastructure managers, 44% of real estate managers and 39% of private equity managers expect their assets to grow by at least 50% in the next five years.
Two-thirds of managers opined that regulation might lead to outsourcing certain functions.
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By GlobalDataBNY Mellon global head of private equity and real estate fund services Alan Flanagan said: "Deep-rooted demographic and macro forces are driving an unprecedented need for investment in real assets such as transport facilities, communications networks, housing and hospitals. These demands far outstrip the reach of government and public finances, and this creates huge opportunities for private capital to play a part in people’s everyday lives."
