Actionable Advisor Ideas

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Key Considerations for Investing in the Private Markets

There are several factors to consider before incorporating private markets investments into your practice and your clients’ portfolios. Use this checklist to see if private markets investing could be a good fit for you and your clients.

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Private Markets investments might be right for your practice if:
  • You’re looking to differentiate yourself. Competition is growing among financial advisors, as well as from other financial services providers. Clients have become more discerning—and they expect more from their advisor. You can make your practice stand out by offering clients access to solutions that other advisors may not be able to offer.

  • You want to appeal to the next generation. Over the next two decades, it is estimated that older Americans will transfer $84 trillion to their heirs and to charity. The younger generations who will benefit are looking for differentiated investment solutions, with 80% of younger investors saying1 they want alternative investments such as private equity and real estate.

  • You want to deliver institutional investments to your clients. While private markets used to be available only to institutional investors and high-net-worth investors, a range of new structures and vehicles is increasing their accessibility. Incorporating private markets investing into your practice can help clients across a wider range of wealth levels reap the potential benefits of this important asset class.

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Private Markets investments might be right for your clients if:
  • Your clients are investing for the long term. Human emotions and public market swings make it harder for clients to focus on goals that are years or decades away. The long-term focus and less frequent pricing of private markets investments make it easier for clients to avoid panic-driven decisions and stick to their plan.

  • Your clients are looking for a potentially smoother ride. During market downturns, even a well-diversified portfolio can suffer broad losses. That’s because public investments tend to be highly correlated with each other. Private markets offer less-correlated investments that can help offset the volatility found in public markets—and potentially deliver a better experience.

  • Your clients want an option that can offer a potentially broader opportunity set. To pursue their long-term goals, clients need access to a comprehensive range of investment options. By concentrating solely in the public markets, they are giving up investment options that can offer potentially attractive and differentiated returns. Adding private markets investments to your clients’ portfolios may provide the opportunity for enhanced risk-adjusted performance.

Ready to learn more?

AccessAres is your resource for education and information about the private markets. Talk to us to learn more about these important asset classes.

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AccessAres is the thought-leadership and educational division of Ares Wealth Management Solutions. The materials distributed by AccessAres are for informational purposes only and do not constitute investment advice or a recommendation to buy, sell or hold any security, investment strategy or market sector. Ares Wealth Management Solutions is a global brand of Ares Management Corporation.

You are now leaving the AccessAres website

AccessAres is the thought-leadership and educational division of Ares Wealth Management Solutions. The materials distributed by AccessAres are for informational purposes only and do not constitute investment advice or a recommendation to buy, sell or hold any security, investment strategy or market sector. Ares Wealth Management Solutions is a global brand of Ares Management Corporation.

You are now leaving the AccessAres website

AccessAres is the thought-leadership and educational division of Ares Wealth Management Solutions. The materials distributed by AccessAres are for informational purposes only and do not constitute investment advice or a recommendation to buy, sell or hold any security, investment strategy or market sector. Ares Wealth Management Solutions is a global brand of Ares Management Corporation.