Democratization of Alternatives

How to Provide European Retail Investors with Access to Alternative Investments

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Jared F. Baucom

Jared F. Baucom

Managing Director, Global Sales & Marketing

Retail Investors in Europe Seek Exposure to Alternatives

Private assets—traditionally available only to large and sophisticated institutional investors—are going down market in Europe. Cerulli expects individual investors to represent a higher proportion of fundraising for private markets over the next 12 to 24 months. Managers are increasing their focus on capturing new growth opportunities in wholesale channels, targeting private banks and family offices for good reason—the largest strategic pool of untapped capital remains in the hands of private individuals.

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Reaching Retail Investors

High-net-worth investors’ (HNWIs’) and ultra-high-net worth investors’(UHNWIs’) interest in private assets has grown substantially in recent years; Cerulli expects this trend to continue, despite the coronavirus pandemic. Our research suggests that HNWIs’ allocations to alternatives will increase to 5% or more over the next three to five years.

Reaching these assets is largely dependent upon where retail assets are managed. According to our research, targeting family offices will be their highest distribution priority for asset managers over the next 12 to 24 months.

Private banks and wealth managers are the fourth-most-important distribution channel for private markets products: 43% of managers said that private banks represent a high opportunity and the remaining 57% said that they represent a medium opportunity. Nearly half of the private banks Cerulli surveyed will be focusing on developing their private equity offerings for mass-affluent clients over the next 12 months.


Asset Managers: Distribution Priorities for Private Equity Over the Next One to Three Years, 2021

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Immediate Takeaways

  • Fund managers should consider targeting European markets where retail clients have less exposure to private investment capabilities, such as Southern Europe.

  • Managers that have already developed alternative investment platforms or are in the process of doing so will find most success establishing partnership agreements with private banks.

  • In addition, fund managers that have direct investment capabilities are better positioned to raise assets from family offices and UHNWIs.

Find New Distribution Avenues

Learn how your firm can position your alternative product lineup to gather retail assets. Cerulli’s strategic consulting service can help you assess the market, and develop pricing, distribution, and marketing models to position for success.

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Subject Matter Experts

Bing Waldert

Bing Waldert

Managing Director, U.S. Research

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Bing Waldert

Bing Waldert

Managing Director, U.S. Research

Bing Waldert leads Cerulli’s U.S. Research team comprising seven research practices that cover all elements of the U.S. asset management, wealth management, and retirement markets. He has authored Cerulli reports on the wealth management industry, high-net-worth market, the annuity industry, and retirement markets. He is a frequent board-level and C-suite speaker and well-regarded industry thought leader. He has spoken in front of the Investment Company Institute (ICI), the Asset Management Association of China (AMAC), the Investments and Wealth Institute (IWI), and the Money Management Institute (MMI).

He has worked on client projects on emerging manager expansion strategies, independent registered investment advisors (RIAs), multi-family offices (MFOs), investment platforms, and the outsourced chief investment officer (OCIO) industry. In addition, he has advised multiple private equity firms on acquisitions in the wealth management space.

Full biography here.

Tom O'Shea, CFA

Tom O'Shea, CFA

Director

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Tom O'Shea, CFA

Tom O'Shea, CFA

Director

Tom has over 20 years of experience in the financial services industry. Prior to joining Cerulli, Tom was an Investment Product Manager at Fidelity’s Global Asset Allocation Division, where he played a leadership role in the ongoing development of Fidelity Personalized Portfolios, Fidelity’s Unified Managed Account (UMA) for retail customers. He also led the investment managers in creating the Breckenridge Municipal Portfolio, Fidelity’s first separate account for consumers managed by a third party. Before working on the retail side of Fidelity, Tom built and led the team that developed Fidelity’s Separate Account Network for registered investment advisors (RIAs), and his group partnered with a third party wrap sponsor to create Managed Account Resources, a UMA platform for RIAs.

Tom began his career in high tech, working in sales, business development, and product management at a number of software firms, including Lotus Development Corporation.

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Brendan Powers, CFA

Brendan Powers, CFA

Associate Director

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Brendan Powers, CFA

Brendan Powers, CFA

Associate Director

Brendan is a member of Cerulli’s Product Development practice, which focuses on trends related to asset managers’ product development and management functions. This broadly includes assessing the opportunity for product development, evaluating emerging product trends, and understanding distribution and product positioning for investment products across retail and institutional channels.

Prior to joining Cerulli, Brendan worked as a Senior Client Associate at Eaton Vance Management, focusing primarily on the firm’s exchange funds.

Full biography here.

Daniil Shapiro, CFA

Daniil Shapiro, CFA

Associate Director

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Daniil Shapiro, CFA

Daniil Shapiro, CFA

Associate Director

Daniil is part of Cerulli’s Product Development practice, where he works on the identification, analysis, and reporting of asset management industry trends with a focus on exchange-traded funds (ETFs) and alternative investments.

Prior to joining Cerulli Associates, Daniil was part of the Product Management and Business Intelligence teams with the MainStay Funds, part of New York Life Investment Management. At MainStay, Daniil supported sales efforts via fund and ETF competitive analysis, product research, and development of marketing materials, as well as performance reporting. Before New York Life, Daniil was part of the risk management practice at Accenture, and held risk and compliance roles at HSBC’s investment bank.

Full biography here.

Scott Smith

Scott Smith

Director

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Scott Smith

Scott Smith

Director

With more than 20 years of financial services industry experience, Scott leads Cerulli’s research efforts focused on investor behavior and advisory relationships. In his time at Cerulli, he has authored more than two dozen in-depth reports on topics ranging from wholesale distribution to digital advice platforms. His research helps Cerulli’s clients understand how to optimize their platforms given the evolving demand for financial advice.

Scott started his career wearing a headset at Putnam Investments’ service center in 1996, before moving to more strategic roles at MFS Investment Management starting in 2000, and then to Cerulli in 2007. In addition, he currently serves as member of the CFP Board’s Digital Advice Working Group, and as a judge for the wealthmanagement.com Industry Awards.

Full biography here.

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