Australia leads for the highest proportion of private investors in the entire Asia-Pacific (APAC) region, accounting for 23% of the region, according to Preqin data.
According to the latest report from Preqin Fundraising from private assets report, Australia and Singapore have both been identified as regional private wealth “hotspots” and, as such, are pockets of wealth that fundraisers can target.
As of January 2024, Australia also accounted for approximately 25% of single-family offices and more than 10% of multi-family offices in the APAC region.
With wealth managers and family offices globally allocating around 22.6% of assets under management (AUM) to alternatives, Preqin highlighted that Australia is rife with opportunities, with local private investors representing a growing pool of potential capital.
“As in the United States and Europe, the Australian Securities Exchange has seen a decline in IPOs and a narrowing of public markets, sparking greater interest among private investors in alternatives,” the report said.
This, Preqin explained, has led to some preliminary regulations within local private markets.
“Managers should be aware that the Australian Corporations Regulator is considering establishing a division to assess private markets within the next 12 months, particularly in relation to concerns over valuations.”
Notably, speaking at an event in Sydney last month, Australian Securities and Investments Commission (ASIC) chairman Joe Longo confirmed that the regulator had stepped up its review of the sector and had put set up a dedicated working group for this purpose.
“In terms of changes that could lead to additional regulation, the Alternative Investment Fund Managers Directive in Europe and the SEC’s quarterly reporting requirements in the United States are benchmarks that managers may need to take taken into account,” the report adds.
Commenting on the data, Rachel Dabora, research analyst at Preqin, said private investors, acting as a potential new frontier in fundraising for alternative fund managers, continue to be a popular topic of discussion.
“Understanding how, who and where to engage in this pool of capital, estimated to be worth around $100 trillion, is still being explored. This is a phenomenon that began with European wealth managers and family offices, the growing population of high net worth individuals in Asia Pacific and through established advisor networks across North America.
“Now is the time for leaders to build these relationships in anticipation of the impending intergenerational transfer of wealth, new technologies that will reduce transaction costs, and growing interest in alternatives,” Dabora said.
