Alt Assets on Track to Increase 59% by 2023: Preqin

These have become more sophisticated, and have developed greater in-house expertise to run their own investment strategies rather than rely on the larger investment banks or traditional managers, he said.

The Preqin survey showed that fund managers think banks and defined benefit pension funds will be significantly less important sources of capital by 2023.

Accurate Prediction?

Could the $14 trillion forecast be too high? Possibly, Preqin chief executive Mark O’Hare said in the report’s introduction, but added, “Preqin will stick with the $14 trillion forecast — but it is more likely to be too low than too high.”

He cited several reasons why the prediction is likely to be accurate. For one, technology, especially blockchain, will facilitate private networks and help investors and fund managers transact and monitor their portfolios, and reduce costs versus public markets.

Futurist Amy Webb recently discussed emerging technology trends with ThinkAdvisor.

O’Hare also noted that investors increasingly want more control and influence over their investments, and the ability to add value, something that private capital provides.

Preqin’s $14 trillion prediction is also likely to be accurate, he said, because emerging markets growth will be a “double whammy” of GDP growth plus deeper penetration of alternative assets. O’Hare pointed out that the Chinese venture capital industry already matches America’s in size.

Then there is the “elephant in the room,” mass affluent individuals around the world who would like to increase their investment in private capital if only the structures and vehicles — and regulation — allowed them to do so. Technology will help, O’Hare said.