Alternative Investments for Private Clients 2007

Table of Contents

• Overview
  • Catalyst
  • Summary
  • Methodology
• Executive Summary
  • Market context
  • Customer focus
• Table of Contents
• Overview 1
  • Catalyst 1
  • Summary 1
  • Methodology 1
• Executive Summary 2
  • Market context 2
  • Customer focus 2
• Market Context 7
  • The vast majority of asset managers in Europe believe that distributing alternative investment products benefits their business and their high net worth clients 7
  • There is a general consensus regarding the most appropriate distribution channels for alternative investments but different regions tend to favor certain channels 10
  • There is a small tier of key players that are popular among asset managers in the main European alternative investments markets 12
  • Data tables 14
• Customer Focus 21
  • The need for diversification and defensive strategies are still the main reasons wealthy clients turn to alternative investments but investors are becoming less cautious 21
  • Hedge funds remain the key alternative investment product area among wealthy clients but private equity is also popular 24
  • High net worth clients are the most important client segment for private equity funds at present, but their importance in most asset classes will decline over the next three years 26
  • In the near future growth will be hampered by lack of understanding and perceived expense among high net worth clients 29
  • Data tables 32
• APPENDIX 37
  • Definitions 37
  • Methodology 37
  • Further reading 37
  • Ask the analyst 37
  • Datamonitor consulting 37
  • Disclaimer 38
• Table of figures
  • Figure 1: Alternative investments are considered to be well suited to high net worth investors across Europe 7
  • Figure 2: All Spanish asset managers believe that alternative investments are well suited to high net worth investors 8
  • Figure 3: Most asset managers believe that alternative investments can help them develop relationships with new wealth manager partners 9
  • Figure 4: There is general agreement as to the best distribution channels across the alternative asset classes 10
  • Figure 5: The French market is notably dominated by the retail banking channel as the primary distribution route for alternative investments sold to high net worth clients 12
  • Figure 6: Diversification is still the primary incentive for wealthy clients to invest in alternative products 22
  • Figure 7: No German asset managers believed that marketing affected wealthy clients' choice to invest in alternative products 23
  • Figure 8: Defensive attitudes in the property investment sector of the alternative investments market have declined over the past year 24
  • Figure 9: Asset managers believe that hedge funds are the most popular form of alternative investment among wealth managers and their wealthy clients 25
  • Figure 10: Hedge funds will remain popular among wealthy individuals in Europe in the medium term 26
  • Figure 11: The importance of high net worth clients in the total alternative investment market will decline over the next three years 27
  • Figure 12: Many asset managers expect high net worth clients' demand to increase most for REITs and private equity funds 28
  • Figure 13: Several factors are important barriers to wider take-up of alternative investments among wealthy clients over the next three years 29
  • Figure 14: Asset managers were almost all positive about growth in demand for alternative investments among wealthy clients 31
• table of tables
  • Table 1: All responses to the question: To what extent do you agree that alternative investments are well suited to high net worth investors? 14
  • Table 2: All responses to the question: To what extent do you agree that alternative investments are well suited to high net worth investors? 14
  • Table 3: All responses to the question: To what extent do you agree that alternative investments offer asset managers the chance to develop new relationships with new wealth manager partners? 15
  • Table 4: All responses to the question: What do you think is the best way for the following alternative investments to be distributed to high net worth investors? 15
  • Table 5: All responses to the question: What do you think is the best way for the following alternative investments to be distributed to high net worth investors? 16
  • Table 6: All French responses to the question: In your country, who are the three best asset managers at building the following alternative investments? 16
  • Table 7: All German responses to the question: In your country, who are the three best asset managers at building the following alternative investments? 17
  • Table 8: All Italian responses to the question: In your country, who are the three best asset managers at building the following alternative investments? 18
  • Table 9: All Spanish responses to the question: In your country, who are the three best asset managers at building the following alternative investments? 19
  • Table 10: All British responses to the question: In your country, who are the three best asset managers at building the following alternative investments? 20
  • Table 11: All responses to the question: In your opinion, what is the most important reason why wealthy clients are demanding alternative investments? 32
  • Table 12: All responses to the question: In your opinion, what is the most important reason why wealthy clients are demanding alternative investments? 32
  • Table 13: All responses to the question: Do your high net worth clients get into the property investment market mainly for defensive or opportunistic reasons? 33
  • Table 14: All responses to the question: What type of alternative investment fund is most in demand by your wealthy clients or the wealth managers who offer your funds to their clients? 33
  • Table 15: All responses to the question: What type of alternative investment fund will be most in demand by your wealthy clients or the wealth managers who offer your funds to their clients in three years' time? 34
  • Table 16: All responses of "high net worth" to the question: Which is your biggest customer group for the following products now, and in three years' time? 34
  • Table 17: All responses to the question: For the following investments, from which customer base will the most increase in demand come in three years' time? 35
  • Table 18: All responses to the question: Thinking of high net worth clients, what do you think will be the major barriers to wider take-up of alternative investments in the next three years? 35
  • Table 19: All responses to the question: Thinking of the next three years, how do you think demand for alternative investments will change among high net worth investors? 36
• Market Context
  • The vast majority of asset managers in Europe believe that distributing alternative investment products benefits their business and their high net worth clients
    • Across the main European markets, opinion on the suitability of alternative investments for private clients varies significantly
    • Alternative investments can help asset managers grow their relationships with partners in wealth management
  • There is a general consensus regarding the most appropriate distribution channels for alternative investments but different regions tend to favor certain channels
    • The retail bank and independent financial advisors are generally considered to be the most appropriate distribution channels for the major alternative investments
    • Preferences for different distribution channels for alternative investments are based on the structure of the local financial service
  • There is a small tier of key players that are popular among asset managers in the main European alternative investments markets
    • Local asset managers have little or no advantage in their home markets according to their peers, as stronger development requires international reach and a large resource base
  • Data tables
• Customer Focus
  • The need for diversification and defensive strategies are still the main reasons wealthy clients turn to alternative investments but investors are becoming less cautious
    • Diversification is still a key consideration for wealthy clients but more are likely to worry about being protected from potential downturns
    • British asset managers gave the widest variety of reasons for wealthy clients to demand alternative investments
    • Wealthy clients are moving away from seeing property investment as a purely defensive option
  • Hedge funds remain the key alternative investment product area among wealthy clients but private equity is also popular
    • In three years' time, hedge funds will be even more in demand relative to other forms of alternative investment in Europe
  • High net worth clients are the most important client segment for private equity funds at present, but their importance in most asset classes will decline over the next three years
    • Private equity funds and REITs will see the most growth in demand from high net worth customers going forward
  • In the near future growth will be hampered by lack of understanding and perceived expense among high net worth clients
    • Despite the barriers, growth in demand for alternative investments among wealthy clients will be fairly strong
  • Data tables
• APPENDIX
  • Definitions
    • Alternative investments
    • HNW
  • Methodology
  • Further reading
  • Ask the analyst
  • Datamonitor consulting
  • Disclaimer
  • List of Tables
    • Table 1: All responses to the question: To what extent do you agree that alternative investments are well suited to high net worth investors?
    • Table 2: All responses to the question: To what extent do you agree that alternative investments are well suited to high net worth investors?
    • Table 3: All responses to the question: To what extent do you agree that alternative investments offer asset managers the chance to develop new relationships with new wealth manager partners?
    • Table 4: All responses to the question: What do you think is the best way for the following alternative investments to be distributed to high net worth investors?
    • Table 5: All responses to the question: What do you think is the best way for the following alternative investments to be distributed to high net worth investors?
    • Table 6: All French responses to the question: In your country, who are the three best asset managers at building the following alternative investments?
    • Table 7: All German responses to the question: In your country, who are the three best asset managers at building the following alternative investments?
    • Table 8: All Italian responses to the question: In your country, who are the three best asset managers at building the following alternative investments?
    • Table 9: All Spanish responses to the question: In your country, who are the three best asset managers at building the following alternative investments?
    • Table 10: All British responses to the question: In your country, who are the three best asset managers at building the following altern
    • Table 11: All responses to the question: In your opinion, what is the most important reason why wealthy clients are demanding alternative investments?
    • Table 12: All responses to the question: In your opinion, what is the most important reason why wealthy clients are demanding alternative investments?
    • Table 13: All responses to the question: Do your high net worth clients get into the property investment market mainly for defensive or opportunistic reasons?
    • Table 14: All responses to the question: What type of alternative investment fund is most in demand by your wealthy clients or the wealth managers who offer your funds to their clients?
    • Table 15: All responses to the question: What type of alternative investment fund will be most in demand by your wealthy clients or the wealth managers who offer your funds to their clients in three years' time?
    • Table 16: All responses of "high net worth" to the question: Which is your biggest customer group for the following products now, and in three years' time?
    • Table 17: All responses to the question: For the following investments, from which customer base will the most increase in demand come in three years' time?
    • Table 18: All responses to the question: Thinking of high net worth clients, what do you think will be the major barriers to wider take-up of alternative investments in the next three years?
    • Table 19: All responses to the question: Thinking of the next three years, how do you think demand for alternative investments will change among high net worth investors?
  • List of Figures
    • Figure 1: Alternative investments are considered to be well suited to high net worth investors across Europe
    • Figure 2: All Spanish asset managers believe that alternative investments are well suited to high net worth investors
    • Figure 3: Most asset managers believe that alternative investments can help them develop relationships with new wealth manager partners
    • Figure 4: There is general agreement as to the best distribution channels across the alternative asset classes
    • Figure 5: The French market is notably dominated by the retail banking channel as the primary distribution route for alternative investments sold to high net worth clients
    • Figure 6: Diversification is still the primary incentive for wealthy clients to invest in alternative investments
    • Figure 7: No German asset managers believed that marketing affected wealthy clients' choice to invest in alternative products
    • Figure 8: Defensive attitudes in the property investment sector of the alternative investments market have declined over the past year
    • Figure 9: Asset managers believe that hedge funds are the most popular form of alternative investment among wealth managers and their wealthy clients
    • Figure 10: Hedge funds will remain popular among wealthy individuals in Europe in the medium term
    • Figure 11: The importance of high net worth clients in the total alternative investment market will decline over the next three years
    • Figure 12: Many asset managers expect high net worth clients' demand to increase most for REITs and private equity funds
    • Figure 13: Several factors are important barriers to wider take-up of alternative investments among wealthy clients over the next three years
    • Figure 14: Asset managers were almost all positive about growth in demand for alternative investments among wealthy clients