While there is an increased demand for private markets, long term asset funds are not proving a popular way to access them for investors, claims Connection Capital’s Claire Madden.
The managing partner at private market investment firm Connection Capital also believes advisers should get on board with the asset class.
Madden said that LTAFs, the first of which was introduced by Schroders in 2023, will not become more popular.
She said: “My fundamental problem is there is a history of private liquidity at the top fund level but it is holding illiquid assets, which is a recipe for disaster.”
Madden believes LTAFs will continue to exist but be primarily used by pension funds, rather than private investors.
More broadly, Madden said advisers have been “slow to embrace private markets” and said her message to advisers would be to engage with clients who are showing an interest in private markets.
She said: “Asset managers and wealth managers can’t ignore private markets for any longer, but they haven’t quite got their heads around it.”
However she acknowledged that private markets would not be right for everyone and it was key for advisers to assess whether the investments were suitable for their clients.
For Connection Capital, Madden said interest in private markets has accelerated in the past two years.
“Investors will continue to seek out these interesting opportunities and for advisers it is whether they want to be part of that story or not,” she said.
“The old model of getting people on a platform with their investment portfolio and charging along the way is changing.”
Though, Madden said she understood the resistance from some advisers, adding: “I do understand that advisers are the first people that get the knock on the door if something does not go to plan.”
tara.o’connor@ft.com
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