Individual investors are considering investing in secondaries as interest in private markets investing grows, according to new research from Wealth Club.

The group said that secondaries funds, which acquire stakes directly in private equity backed businesses as well as in other private markets funds, can offer the potential for a more diversified portfolio as well as lower risk and quicker exits than investing in conventional private equity funds.

Global transaction volumes in secondaries hit $162bn at the end of last year – a 45 per cent increase from the previous year – and volumes are predicted to exceed $175bn this year.

Wealth Club’s study, which was based on 420 of its customers, indicated that 45 per cent are very or quite likely to consider investing in secondaries. However, 41 per cent of respondents said they were not particularly or not at all likely to consider investing. A further 14 per cent did not express a view.

The research also suggested that 63 per cent of Wealth Club customers said they have or would be interested in investing in semi-liquid private markets funds.

Founder and chief executive of Wealth Club, Alex Davies, commented: “Sophisticated individual investors are increasingly open to different types of investments as demonstrated by their interest in secondaries.

“Transaction volumes in the sector are growing and that is opening up more opportunities for individual investors who typically struggle to access opportunities in private markets funds.”

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