It’s been one of the hottest investment stories of the past two years. But are there signs that the appetite for private assets and other alternative investments is waning?

We’ve covered the efforts that mainstream asset managers have made to move into this area, as well as the rise of alternative investment platforms and the arrival of specialist firms such as Blackstone in the wealth management space.

Those initiatives have been mirrored by a surge of interest from professional fund buyers. We’ve been polling the fund selector delegates at our biggest events, in Berlin and Montreux. As the first chart shows, a majority of those attending Citywire Berlin this year still see this as a growing area for the firms they work for. But while 63% is a big number, it’s a big drop from 86% in Montreux six months earlier and also down on the 72% at Berlin 2021.

Of course, this may reflect the fact that some firms that have been growing this part of their business over the past year may have reached an optimum allocation level. It may be that they don’t feel the need for further moves into this area. But take a look at the next chart, which adds another dimension to the story.

The key takeaway here is that a pretty consistent number of the institutions these fund analysts work for, about 40%, would like better access to these assets but see liquidity as a problem. This suggests the initiatives around alts platforms and ‘semi-liquid’ structures have some way to go to win the confidence of these investors. It should also give those big private asset specialists that have targeted this audience pause for thought.

Perhaps the warning sign is in the column on the right: the number of buyers who think these assets are just not right for their end investors is markedly higher than six months ago.

But as is so often the case with surveys of intentions and tests of sentiment, there’s an important caveat. Take a look at this next chart.

At first glance, this chart seems to paint a fairly one-sided picture. If selection units aren’t reorganising to do more analysis on these assets, they’re unlikely to buy them.

However, we have the advantage of seeing our survey data line by line. It turns out that within that 27%, the ‘Yes’ category, are some of the very biggest firms. If a major bank reorganises its selection team to devote more analyst resources to these assets, it’s clearly serious about investing in them.

Have we reached peak private assets? Yes and no. Investors are sounding more cautious, which may also be connected to the resurgence of fixed income strategies. But with those big buyers reorganising, there’s still a very large chunk of the market for promoters of these strategies to aim at.