Our Managing Director Mathew Cassidy joined James Kirby, Wealth Editor at The Australian for an episode of The Money Puzzle to explain what unlisted assets are, balancing risk and return, and how Partners Private are opening the doors to unlisted investment opportunities that clients would not be able to access on their own.
Amongst the ongoing uncertainty that investors are facing, we remain convinced that including an allocation to private markets can not only enhance total returns but also smooth the overall investment path. We continue to look for attractive investment opportunities that offer both portfolio diversification and attractive risk/return characteristics. While private markets are often seen as a single investment option, it is important to note that return dispersion tends to be relatively high across these assets compared to public market equity and bond strategies. Therefore, a disciplined and rigorous due diligence processes combined with sector selection and partnerships with experienced investment managers is crucial for investment success.
For most of the past year, investors grappled with elevated levels of uncertainty. While the Australian and US economies managed to (so far) avoid an economic hard landing, persistent inflation and higher interest rates remained a concern for capital allocators. In this environment, investment portfolios that included exposure to alternative asset classes tended to deliver higher and more consistent returns. For 2024 and beyond, we expect long-term structural trends to support further growth across private markets with opportunities from repricing persisting in the coming years.
Economic developments over the last month have included sticky inflation, the fear of a wage-price spiral and a return of central banks hiking interest rates. These all weighed on public and private markets at the end of the second quarter.
The wholesale investment market was strong in 2022, with Partners Private assessing hundreds of opportunities and presenting clients with 8 new investments over the course of the year. These investments included property equity, private equity, mezzanine debt, preferred equity and property debt, and raised more than $105M in investment capital.
The current market environment for public and private investments is undergoing a period of change and volatility bringing both risk and opportunity. The main drivers of markets are the policy settings of central banks, governments, and the facilitation of loans by commercial banks, which determine the supply of money in the economy and financial system.