Retail investors increasing PE allocations

Research conducted by Neuberger Berman and Research in Finance has found retail investors are increasing their exposure to PE, with net 11% of retail allocators in Europe having increased PE allocations of their clients in the past 12 months.

The European Fund Selector Study contains data from 892 UK and European fund selectors working for retail and institutional investors, conducted using computer-assisted telephone interviews and online surveys.

According to the report, an average of 7.7% of retail client assets are currently invested in private markets, which is below the 9.2% proportion for institutional clients.

The pioneers of general allocator increase in PE are Benelux and Italy, with a net PE increase of 16% and 15% respectively.

Further, the study predicts more demand to come from retail allocators in future, based on the statistic that a net 12% of European retail allocators are set to increase client exposure to the industry.

Main areas of investment interest include equity primaries and co-investments.

To continue supporting heightened individual investor access into private markets, Neuberger Berman recently launched its third European Long-Term Investment Fund (ELTIF), which carries a minimum investment of €25,000 for European investors.

José Cosio, managing director at Neuberger Berman, commented on the launch: “We believe the ELTIF market, which grew by more than 50% in 2022 year over year, could become the standard for providing European individual investors with access to private equity. In the UK, the industry is increasingly embracing the new LTAF structure, which will also help to reduce barriers to entry. As UK private market allocations lag European peers, this is a welcome development.”

The European Commission reformed the ELTIF framework earlier this year, allowing master feeder and fund-of-funds structures.

In other retail news, EQT launched its first strategy available to individual investors earlier this week.