Speaker 1: In his annual letter this year, Larry Fink, CEO of Blackrock,
Speaker 1: said that investors should allocate up to twenty percent of
Speaker 1: their savings into private assets. That advice from the world's
Speaker 1: largest asset manager is quite a departure from the traditional
Speaker 1: sixty to forty stocks and bond portfolio. That kind of
Speaker 1: advice may not have even been possible a decade ago, and.
Speaker 2: It highlights an interesting shift underway in investing where alternative
Speaker 2: assets are slowly becoming more available to the average investor.
Speaker 2: For a long time, these opportunities think infrastructure, private credit
Speaker 2: where the exclusive domain of the super rich and big
Speaker 2: institutions like pension funds and insurance companies. But new products
Speaker 2: and technologies have been opening up this world for the
Speaker 2: average person. This is what some people are calling the
Speaker 2: democratization of investing.
Speaker 1: What's the state of play for this democratization. What are
Speaker 1: some of the new areas of private investment that individuals
Speaker 1: should be aware of, and what are the risks such
Speaker 1: as potentially low returns. You're listening to Asia Centric from
Speaker 1: Bloomberg Intelligence, and today we're speaking with someone who can
Speaker 1: give us a view into how this landscape is evolving.
Speaker 1: We're joined by Stephanie Un, head of Hong Kong for Endows,
Speaker 1: it's an investment platform and advisor to more than two
Speaker 1: hundred and fifty thousand individuals, family officers and institutions across Asia.
Speaker 1: They connect investors to fund managers and they've got more
Speaker 1: than seven billion dollars in client assets under management, including
Speaker 1: four hundred million from private assets. Stephanie, welcome to the show.
Speaker 3: Thanks for having me.
Speaker 1: Stephanie. For listeners, can you give us an idea of
Speaker 1: how endows helps average investors connect with private asset opportunities?
Speaker 3: Sure? So, Endowser's name actually stands for endowment and the
Speaker 3: best sting for all of us. We wanted to help
Speaker 3: individual investors to be able to invest like an institution,
Speaker 3: and we got our inspiration really from the Yale Endowment.
Speaker 3: So for those of you guys know about Yale Endowment,
Speaker 3: probably know their founding CIO David Swinson, one of the
Speaker 3: legendary investors of our times who passed away a few
Speaker 3: years ago, but he was really the pioneer of sort
Speaker 3: of advocating for as allocation and particularly including private assets
Speaker 3: into investors portfolio. He famously talks about how a lot
Speaker 3: of investors overpay for liquidity. So at the founding of Endawas,
Speaker 3: we talked about how there is now kind of this
Speaker 3: increasing interest to help individuals to demoketize into private markets.
Speaker 3: But it's actually at the very core the beginning of Endawas,
Speaker 3: we actually really wanted to help clients to allocate like
Speaker 3: an endowment fund, like a Yale endowment, because we believe
Speaker 3: this is the sort of as allocation framework. Actually it's
Speaker 3: a lot more scientific for investors than just speculating and
Speaker 3: punting on stocks. So in Dallas, this is the core
Speaker 3: of our work. How do we help our clients to
Speaker 3: allocate like an endowment fund, and it could be a
Speaker 3: combination of public markets, private markets, alternatives and as sort
Speaker 3: of we mentioned that the intro is really exciting that
Speaker 3: previously a few years when we first started in Dallas,
Speaker 3: we started until I was seventeen. At that time, we
Speaker 3: actually couldn't really offer this yet. But in the past
Speaker 3: kind of eighteen months we've really been able to work
Speaker 3: with a lot of fund managers to enable this to
Speaker 3: really be able to realize this vision that we have
Speaker 3: that helping individual investors to invest like an endowment fund.
Speaker 2: So can you tell us a bit about the private
Speaker 2: asset side. As John mentioned, you have about four hundred million.
Speaker 2: That's you know, a chunk of the seven billion, but
Speaker 2: it's your fastest or one of the fastest growing areas.
Speaker 2: So can you tell us about why that's such a
Speaker 2: fast growing area and sort of why you're seeing a
Speaker 2: lot more investors coming to you for that.
Speaker 3: Yes, so right now in Dallas, we offer our service
Speaker 3: to Hong Kong and Singapore, and as you've rightly mentioned,
Speaker 3: we see alternatives, including private markets and hedge funds the
Speaker 3: fastest growing asset class on our platform. It has tripled
Speaker 3: year on year to close to four hundred million in
Speaker 3: terms of client assets. And I'd say for a lot
Speaker 3: of clients there are a lot of reasons to why
Speaker 3: they consider including private markets and alternatives into their portfolios.
Speaker 3: But I would summarize three big reasons. The first and
Speaker 3: it's also why we advocate our clients to consider most
Speaker 3: important thing, I think it's helping clients to further diversify
Speaker 3: their portfolios. I think all of us have experiences in
Speaker 3: the past couple of years, especially twenty twenty two was
Speaker 3: really something that a lot of people had soul searching
Speaker 3: of the public markets, the correlation of different asset classes.
Speaker 3: The correlation really went up. You have public equities, public
Speaker 3: bonds all went down double digits, so there was quote
Speaker 3: unquote no place to hide. So clients are thinking, Okay,
Speaker 3: how can I further diversify my portfolios to really strengthen
Speaker 3: the resilience. So private markets is a very broad term.
Speaker 3: There are many sub asset classes. You have private equity,
Speaker 3: you have private credit, you have private real estate, and
Speaker 3: increasingly there are different sub asset classes. We see new
Speaker 3: innovations that you can invest in, like intellectual property royalties
Speaker 3: from IP rights. Those are all very interesting asset classes
Speaker 3: that were previously not available for individual investors. These kind
Speaker 3: of sub asset classes do have less correlation to public markets,
Speaker 3: so it really helps and make sense for investors as
Speaker 3: they look to build a more diversified portfolio. And I
Speaker 3: guess the second point I briefly touched upon, it's increasing
Speaker 3: your investment universe. You can invest in things that are
Speaker 3: kind of out of touch if you just dip your
Speaker 3: toes into public markets. Right, the largest private companies we've
Speaker 3: all heard of, the SpaceX, the open AIP. You can
Speaker 3: invest in these companies through the public markets in this
Speaker 3: part of the world. There are also many familiar names,
Speaker 3: the likes of Byedance, the parent of tektok. These are
Speaker 3: all private companies and in fact, if you look at
Speaker 3: the statistics, just look at the US right supposed to
Speaker 3: be the most liquid market in the world already if
Speaker 3: you look at the number of total companies with one
Speaker 3: hundred million US revenue above, actually there are seven times
Speaker 3: more private companies than public markets for clients to invest into.
Speaker 3: And we've also seen this trend. Interestingly, since two thousand,
Speaker 3: the number of public companies has really start to decline
Speaker 3: by almost half. So actually the investable universe for individual
Speaker 3: investors if you just invest in public markets is shrinking.
Speaker 3: And thirdly, obviously very important if you look at historical data,
Speaker 3: no matter how you cut it, and for those of
Speaker 3: us who study finance understand this concept of this illiquid
Speaker 3: premium what Swinson said, a lot of people overpay for
Speaker 3: liquidity by investing into private markets. Historically you've seen in
Speaker 3: every of these subasset classes it does offer investors higher
Speaker 3: risk adjusted returns. So, on top of those two reasons
Speaker 3: that I mentioned about sort of potentially harnessing higher potential,
Speaker 3: higher adjusted returns. Obviously it's also something very attractive to investors.
Speaker 3: So I'd say many, many reasons, but those three reasons
Speaker 3: are most compelling for a lot of investors to consider.
Speaker 2: In private asset space. I mean, how much money do
Speaker 2: I need to have as a retail investor to invest
Speaker 2: in something? And are we talking about things like you know,
Speaker 2: toll roads in Brazil that pension funds invest in, or
Speaker 2: are these different assets? Like who is actually able to
Speaker 2: invest in this?
Speaker 3: So we talked about democratization of private assets, but in
Speaker 3: our industry is still very highly regulated industry. For a
Speaker 3: lot of these private markets funds, even though we've quote
Speaker 3: unquote democratized, there's still privy to what we call professional
Speaker 3: investors or credit investors, so people with a certain net worth.
Speaker 3: And even though we've worked very hard, for example, in Dallas,
Speaker 3: we work very hard without for manager partners to lower
Speaker 3: the investment minimum. Generally the investment minimum for these assets
Speaker 3: are at one hundred thousand US dollars or above. But
Speaker 3: the saving grace is.
Speaker 2: Not quite democratization yet.
Speaker 1: It's still not main street, it's literally.
Speaker 3: But everything is on a relative level. So historically even
Speaker 3: the lowest, lowest if you go to a private bank.
Speaker 3: Let's say you're quote unquote ultra high networth individual. The
Speaker 3: lowest probably it's two to three million US. So on
Speaker 3: a relative basis, from two to three million US to
Speaker 3: one hundred thousand, it's gone down quite a bit if
Speaker 3: you do the math. But what's more interesting is historically
Speaker 3: that two three million, it's just into one single product
Speaker 3: in Dallas, and a lot of our clients, our core
Speaker 3: client base, are fluent clients, early high network clients. What
Speaker 3: would realize what they want? It's that beta exposure into
Speaker 3: private markets. So I've never had access to private credit.
Speaker 3: I've never get access to private equity, not necessarily like
Speaker 3: a professional institutional investor looking for alpha, like I am
Speaker 3: looking at manager a vintage twenty and twenty that's the
Speaker 3: best performing. But for a lot of clients it's their
Speaker 3: first double into the asset class. They're okay with just
Speaker 3: getting the beta, higher potential of res adjustice return. So
Speaker 3: we were actually launching a lot of these what we
Speaker 3: call funnel funds. So one hundred k US dollars, you
Speaker 3: get a portfolio of private equity managers the likes of
Speaker 3: your black Row, your ares, your KHR, and all into
Speaker 3: one portfolio with your one hundred K check. So yes,
Speaker 3: i'd agree it's not yet sort of average investor yet,
Speaker 3: but at least to a certain lower tier. Now you
Speaker 3: can get a diversified exposure to these blue chip names
Speaker 3: which I started out my career investment banking. These are
Speaker 3: gps that I used to cover. I would really never
Speaker 3: imagine that I could become an investor in these funds.
Speaker 3: So I think as a step.
Speaker 1: Towards this, Asia Centric is produced by Bloomberg Intelligence. We're
Speaker 1: more than five hundred experienced analysts and strategists work around
Speaker 1: the clock to bring you timely, world class research. Our
Speaker 1: coverage spans two hundred market industries, currencies, commodities, and industries,
Speaker 1: as well as over two thousand equities and credits. To
Speaker 1: learn more about Bloomberg Intelligence, visit BI go on the
Speaker 1: Bloomberg terminal. If you like what you're hear, don't forget
Speaker 1: to subscribe and shair. What type of returns do you
Speaker 1: think investors should be expecting in the private space?
Speaker 2: Yeah, because in recent years the returns haven't necessarily been
Speaker 2: as high as you know five six years ago.
Speaker 3: So I'd say, going back to what I mentioned when
Speaker 3: we advise clients to consider private markets. The number one
Speaker 3: reason I always share with clients it's diversification, not necessarily
Speaker 3: the returns, because no one can really guarantee the returns. Yes,
Speaker 3: we look at historical numbers, the likes of private equity,
Speaker 3: the likes of private credit. Historically the numbers have been
Speaker 3: higher than public markets. But you never know at what
Speaker 3: cycle you invest, And for example, in private equity, I'm
Speaker 3: sure a lot of us are familiar with the term
Speaker 3: different vintages, right, different vintages could also at different times
Speaker 3: where you invest could also have a big impact on
Speaker 3: your ultimate returns. So no matter how you cut the data,
Speaker 3: there's definitely higher resuggested returns. And going back to what
Speaker 3: John you mentioned earlier, I also find it super interesting
Speaker 3: for Larry Think to have mentioned that fifty to thirty
Speaker 3: twenty allocation. And we've ran some numbers, including us including
Speaker 3: a lot of platforms for individual investors. I'm not talking about, okay,
Speaker 3: making one specific bet on one private equity fund or
Speaker 3: private credit fund. If you're looking at diversification and you
Speaker 3: include a more kind of diversified private markets, you have
Speaker 3: a bit of private equity, a bit of private realist
Speaker 3: at a bit of prior credit into your portfolio and
Speaker 3: kind of include it in your sixty to forty portfolio.
Speaker 3: If we're not looking at okay, you just happen to
Speaker 3: invest in the top tier managers. But if you get
Speaker 3: the general average returns overall, it improves against a sixty
Speaker 3: to forty by one hundred to one hundred fifty basis point,
Speaker 3: and it helps kind of lower the volatility also by
Speaker 3: twenty to thirty percent. So I think that's really interesting
Speaker 3: and for Larry think right for him about fifteen twenty
Speaker 3: years ago to make that big bet on ice shares
Speaker 3: and really revolutionized and popularized index investing, for him to
Speaker 3: really say, okay, the next thing is private markets. I
Speaker 3: think it's it's quite powerful, and we are seeing a
Speaker 3: lot of these trends that he mentioned coming together.
Speaker 1: And for the benefit of the listeners, Alarry thinks suggested
Speaker 1: that you should invest fifty percent in stocks, thirty percent
Speaker 1: in fixed income or bonds, and twenty percent in private assets.
Speaker 2: And I just got to ask, I mean, not to
Speaker 2: put you up against Larry, I think, but do you
Speaker 2: think that that twenty percent or that mix that John
Speaker 2: just mentioned with twenty percent to private assets. Do you
Speaker 2: think that's the right one?
Speaker 3: So Eden, Dallas, we never give out any like sort
Speaker 3: of okay, everyone should follow the same rule, because we
Speaker 3: do think personal investing is something very personal to your
Speaker 3: own circumstances. So for us, we definitely remind our clients
Speaker 3: that there are reasons to why private markets historically has
Speaker 3: only been sort of investable by institution investors or had
Speaker 3: now worth individuals because it is indeed illiquid. So we
Speaker 3: definitely would not advise our clients to invest their liquid
Speaker 3: pocket or their sort of raining day money into private markets.
Speaker 3: That's really not right. So it really depends on you
Speaker 3: look at your needs, You look at your current wealth,
Speaker 3: how much of that wealth you can park away that's
Speaker 3: for long term investing, And it most importantly has to
Speaker 3: be matched against your risk appetite. Because finance one oh
Speaker 3: one higher returns, you have to take higher risks, so
Speaker 3: it is slightly more risky, particularly less liquidity in terms
Speaker 3: of these investments. So I'd say for each individual investor,
Speaker 3: it really depends. It could be as low as new
Speaker 3: I cannot afford to take any illiquid risk, or to
Speaker 3: five percent, or to ten percent or to twenty percent.
Speaker 3: But I'd say probably unlikely one hundred percent. There must
Speaker 3: there has to be a bit of your wealth that
Speaker 3: you need to keep it liquid, So I'd say twenty
Speaker 3: percent ballpark generically sounds right, but obviously each individual you
Speaker 3: should do your own whole work.
Speaker 1: Why now, like private equity has been around for a while,
Speaker 1: saying with infrastructure, private credit is a little bit new,
Speaker 1: but hedge fund's investing has been around for a long time.
Speaker 1: What's open the market to retail investors.
Speaker 3: There's definitely that pull and push factor. So, as I mentioned,
Speaker 3: in the past couple of years, we have had a
Speaker 3: bit of volatility in the markets, and very famously, I
Speaker 3: think in the industry people would know there's this denominator effect.
Speaker 3: So historically these private markets and alternative investments have only
Speaker 3: been accessible to institutional investors. And in the past couple
Speaker 3: of years, for example, during COVID, the public markets really
Speaker 3: dropped a lot. And because of that denominator. In fact,
Speaker 3: a lot of large institutions how they invest. They have
Speaker 3: a mandate and I target let's say thirty into private markets,
Speaker 3: forty percent into public equities, and then the rest in
Speaker 3: public bonds. And because when the public market bit dropped.
Speaker 3: The private market bit is overexposed. It's really out of
Speaker 3: wack of their target as allocation, so they have to sell.
Speaker 3: And a lot of them fund managers, when they realize
Speaker 3: their historical target clients need to all suddenly have to
Speaker 3: sell all facing this problem, they need to find other
Speaker 3: pockets of capital to take this demand. And this is
Speaker 3: kind of the push factor. The pull factor is what
Speaker 3: I mentioned. For a lot of individual investors, they're also
Speaker 3: realizing there is this meriage for them to double their
Speaker 3: tolls into as allocating into private markets. Of the three
Speaker 3: reasons that I mentioned, and sort of these two factors
Speaker 3: coming together, the industry realized, oh, there is that business
Speaker 3: case that need to help enable individual investors to be
Speaker 3: able to get access to that. So I'd say there
Speaker 3: are two very important things that really help enabled individual
Speaker 3: investors to gain access. One is the or the proliferation
Speaker 3: of what we call evergreen semi liquid funds green semi
Speaker 3: liquid funds. So historically for private markets, the only way
Speaker 3: you can invest is what we called a close ended fund.
Speaker 3: So what big institutions, the softeign, well funds, the insurance company,
Speaker 3: what they had to commit to a manager. It's Okay,
Speaker 3: I'll give you money and it gets locked up by
Speaker 3: five to seven years, and you invest in market companies.
Speaker 3: In the next five to seven years, I cannot redeem
Speaker 3: the capital, and in five to seven years you promise
Speaker 3: to help return the capital. And there's also a nuance
Speaker 3: that you commit a capital and then depends on when
Speaker 3: the investment opportunity arise, then they would do capital calls.
Speaker 3: So that's kind of the traditional what we call locked
Speaker 3: up structure close ended fund that you're completely locked up
Speaker 3: for five seven years. I think for institutions, you have
Speaker 3: professional teams to manage your cash flows, and it's accepted
Speaker 3: that approach for a lot of individual investors. So our
Speaker 3: circumstances changed, we might change jobs, we might be out
Speaker 3: of jobs, we might enter into a different life stage.
Speaker 3: Five to seven years is a really long time. It's
Speaker 3: quite difficult for individuals to be able to commit to
Speaker 3: a close ended vehicle for five to seven years and
Speaker 3: to manage that what we call quote unquote capital calls.
Speaker 3: So when you get a capital call kind of email
Speaker 3: from your fund manager, they'll be like, you committed to
Speaker 3: write a check of X dollars and now I've identified
Speaker 3: an investment opportunity. You need to wire the money to
Speaker 3: meet in two weeks. If you have an investment team
Speaker 3: or treasury team, yes you can do that. For individual investors,
Speaker 3: you might be on holiday, you might be busy on
Speaker 3: something is very difficult. So the industry realized that the
Speaker 3: closed ended funds quite difficult for individuals to quote unquote
Speaker 3: use as a vehicle. A fund manager that's very prominent
Speaker 3: in kind of an innovator in the space, it's Partners Group,
Speaker 3: Swisserland based private equity manager who first started this what
Speaker 3: we call semi liquid open ended vehicle. When was that
Speaker 3: it should be about more than ten years ago, but
Speaker 3: it really only proliferated in the past couple of years.
Speaker 3: Very interesting evergreen vehicle, meaning so usually for private closed
Speaker 3: ended funds it only has like a fun life of
Speaker 3: five to seven years. Once it's done investing, it's wine down.
Speaker 3: But for evergreen, you don't have that. It's it's evergreen,
Speaker 3: it's always there, it's always okay to take client moneies.
Speaker 3: And when I say semi liquid, it's not fully liquid.
Speaker 3: Usually the managers understand individuals they need some sleeves of
Speaker 3: pocket of liquidity. So all these semi liquid vehicles. They
Speaker 3: usually allow individuals to have some redemption kind of liquidity
Speaker 3: on an intermittent basis, maybe on a quarterly basis, but
Speaker 3: they do have gates because the underlying you're investing in
Speaker 3: liquid assets. But they would then make sure that a
Speaker 3: pocket of the underlying fund invests in some more liquid
Speaker 3: assets to be able to honor these redemptions. So semi
Speaker 3: liquid evergreen vehicles have really been proliferated and it's much
Speaker 3: better investment vehicle for a lot of investors. And a
Speaker 3: lot of these evergreen vehicles are also very diversified mixed
Speaker 3: vintages instead of previously for closed ended funds, you have
Speaker 3: to pick. You might have very professional teams for professional
Speaker 3: investors to pick the right vintage. So semil the quid funds,
Speaker 3: it's definitely one and then the second bid. It's technology,
Speaker 3: So thanks John for the introduction. For example, for in Dallas,
Speaker 3: we are a hybrid platform where a lot of clients
Speaker 3: can use our platform online and we serve over two
Speaker 3: hundred and fifty thousand clients and for us, we can
Speaker 3: act as a aggregator for a lot of these fund managers.
Speaker 3: So the managers we work with the likes of black Raw, KKR, CARLA.
Speaker 3: Historically they serve the largest institution investors and they don't
Speaker 3: want to have to build out an army to do
Speaker 3: KYC on individual investors checking AML. So working with tech
Speaker 3: platforms like ourselves to be able to connect with us
Speaker 3: and we act as an aggregator and also personalizing that
Speaker 3: advice for clients to make sure their funds are properly distributed.
Speaker 3: It's also the reason. Yeah, so when we talk.
Speaker 2: About technology, we're literally talking about a platform.
Speaker 3: Like in Dallas, including yes, definitely including in Dallas.
Speaker 2: Yeah.
Speaker 3: So I think for a lot of fund managers historically
Speaker 3: they don't want to touch individuals because it's difficult to
Speaker 3: have to educate all your average show one by one
Speaker 3: in terms of what is private equity, what is private credit.
Speaker 3: But through platforms like in Dallas, we help become the aggregator.
Speaker 3: We use technology, use AI to help personalize that advice
Speaker 3: to make sure that the right allocation, the right advice
Speaker 3: gives to the right kind of end client. So that
Speaker 3: gives confidence to these managers that oh, as she don't
Speaker 3: have to worry that I have to deal with the
Speaker 3: two hundred and fifty thousand clients I have I just
Speaker 3: have to deal with in daoas and they can help
Speaker 3: me connect me to these individual pools of capital.
Speaker 2: How do you use AI? You just mentioned that, I
Speaker 2: think it's interesting.
Speaker 3: So, I mean AI is something that's been around for
Speaker 3: a really long time, and I think what recently been
Speaker 3: exploded it's jen ai. But for us at En Dallas,
Speaker 3: AI is really two things to what we call the
Speaker 3: two E'SE one is efficiency and then the other one
Speaker 3: is experienced And in this circumstance, I think most interesting
Speaker 3: it's personalizing that advice to individuals because going back to
Speaker 3: John's question, right, we don't think every client should get
Speaker 3: twenty percent as an allocation to power markets is really
Speaker 3: different for everyone's circumstance. So how do I use AI
Speaker 3: to ask the right questions to understand what exactly is
Speaker 3: the right as allocation to our clients. We're constantly embedding
Speaker 3: these elements onto our platform through interactions with clients to
Speaker 3: help them come up to the right allocation.
Speaker 2: Right, so it would be like a chatbot or.
Speaker 3: Yes, including a chatbot as well as for our human
Speaker 3: client advisors, we also have AI bots that help very
Speaker 3: quickly go through all the alternatives and product information to
Speaker 3: be able to generate, let's say, answers comparisons for our
Speaker 3: clients because a lot of these alternatives it's actually much
Speaker 3: more complicated than say a money market fund and equity fund.
Speaker 3: We don't have a standardized fact sheet. So actually a
Speaker 3: lot of these AI tools actually really helps us to
Speaker 3: break down these very sophisticated documents. And it's really difficult
Speaker 3: for our clients to read these documents. So how do
Speaker 3: we leverage technology to help break down the knowledge barrier
Speaker 3: to help clients to be able to understand and absorbed
Speaker 3: and to find the right information to answer the questions.
Speaker 3: It's also something we find very very interesting.
Speaker 1: Stephanie, you mentioned that in endows is named after the
Speaker 1: endowment investment philosophy, and you mentioned Yale University as well. Recently,
Speaker 1: there's been some negative news like in particular, US university endowments,
Speaker 1: who are heavily exposed to alternative investments, are looking to
Speaker 1: sell some of their private equity stakes. How should we
Speaker 1: interpret these now? I know there's a bit of a
Speaker 1: political element because the President Trump is threatening to reduce
Speaker 1: some funding to US universities, But what's your take and
Speaker 1: how should retail investors view this?
Speaker 3: Exactly. So I think this really goes back to how
Speaker 3: much you allocate really depends on your circumstance, and the
Speaker 3: circumstance these endowment funds have really changed. I think it
Speaker 3: really makes sense. I mean, if their funding is getting
Speaker 3: cut and all these endowments have a yearly expensive daily expenses,
Speaker 3: they need to pay their staff, they need the liquidity,
Speaker 3: then it makes sense for them to cut down on
Speaker 3: their over exposure if now they need more liquidity, if
Speaker 3: federal funding is not coming in retail investors, I'd say
Speaker 3: is on the other spectrum. So we've seen some institutional investors,
Speaker 3: including Yelle endowmen historically allocate close to fifty percent or
Speaker 3: over fifty percent to part markets. But for individual investors
Speaker 3: on a global scale, including high networth individuals, that average
Speaker 3: exposure is about five percent, and I think in this
Speaker 3: part of the world it's way lower than five percent.
Speaker 3: It's probably zero points something. So we're under exposed. So
Speaker 3: I think it's a very very different situation. Those institutions
Speaker 3: are overexposed, and they now probably need to think about
Speaker 3: having well liquidity. Given John, you mentioned circumstances that they
Speaker 3: are facing.
Speaker 1: Stephanie, I wanted to ask you a broader question, not
Speaker 1: just limited to private assets, but there's been this big
Speaker 1: push for investors to sell US assets. At the beginning
Speaker 1: of this year, everyone's talking about US exceptionalism. Everyone was
Speaker 1: heavily exposed to US assets. Then we had this present
Speaker 1: Trump's tariff's potential trade war, and then you had this
Speaker 1: like sell America trade. Did you see this in your data?
Speaker 3: I think definitely we've seen client interests. Historically they have
Speaker 3: not asked about, oh, for this portfolio data invested in
Speaker 3: how much what's the proportion that's geographical exposures to the US.
Speaker 3: But obviously US is still the largest, most liquid market globally.
Speaker 3: We think it still has a role in clients investment portfolios.
Speaker 3: And we also remind clients when you're investing for five years,
Speaker 3: ten years, twenty years, you shouldn't act upon on overnight news.
Speaker 3: You're not the professional trader. And I think the events
Speaker 3: in the past couple of weeks, in the past months
Speaker 3: also demonstrated sometimes newsflow can act very fast, but it
Speaker 3: does make sense to have a diversified portfolio. Once again,
Speaker 3: and in the past couple of years, there has just
Speaker 3: been so many incidents to continuously remind clients of this point,
Speaker 3: and since this is an Asia centric podcast, I think
Speaker 3: and this happens with investors around the globe, but particularly
Speaker 3: in Asia. We've seen Hong Kong and Singapore clients both
Speaker 3: do have this home bias kind of. We see this
Speaker 3: a lot that their jobs already levered to the home market,
Speaker 3: their properties levered to home market, and their investment portfolios
Speaker 3: also over levered to their home market. And when the
Speaker 3: home market goes south, it's double triple whammy impact, right,
Speaker 3: So interestingly that it reminds clients that they should stay
Speaker 3: diver and interestingly for priate markets, because Asia, the prime
Speaker 3: markets segment is still kind of in this nation state,
Speaker 3: a lot of the private markets opportunities and investment opportunities
Speaker 3: tend to be in US and Europe. It's also part
Speaker 3: of the reason why we see Asian investors interested in
Speaker 3: getting exposure to private markets. So in this part of
Speaker 3: the world, a lot of including us including parents, like
Speaker 3: to buy property. Right, if a client has just sold
Speaker 3: a few properties in this part of the world and
Speaker 3: they've never invested in developed market property, maybe it makes
Speaker 3: sense to invest in a private real estate fund ran
Speaker 3: by a professional fund manager to diversify that real estate exposure.
Speaker 3: So it's very interesting, particularly from an Asian centric perspective.
Speaker 3: We've seen private markets also has its appealed to some
Speaker 3: Asian investors in terms of diversifying their underlying exposure.
Speaker 2: Thanks so much for joining us today, Stephanie.
Speaker 3: Thank you.
Speaker 2: You've been listening to Asia Centric from Bloomberg Intelligence. I'm
Speaker 2: Kaye Teedmitrieva in Hong Kong and.
Speaker 1: I'm John Lee, also in Hong Kong. You can find
Speaker 1: all our episodes on Apple Podcasts, Spotify or wherever you listen.
Speaker 1: And this podcast was also produced and edited by Clara
Speaker 1: Chen And thanks for listening.
Speaker 2: See you next time.