A BCG (Boston Consulting Group) report “The Future is Private: Unlocking the Art of Private Equity in Wealth Management”, by Boston Consulting Group (BCG) explains how the emerging dynamics within private equity investments area plays an important role as a potential investment option and opportunity for HNWIs (high-net-worth-individuals).
Expected to have a CAGR of 19% through 2025, the report concludes on the potential of private equity, and how the HNWIs are affirmative about the emerging opportunities.
Post-pandemic developments are unsettling in certain dimensions like uncertain economic conditions, global recessions, etc. but for the opportunity finders, those who prefer to time their investments, the current scenario is seen as a golden opportunity for long-term investments.
One such elite asset class to consider during the economic chips-down scenario is real-estate investments.
The global pandemic didn’t make the high-net-worth individuals (HNWIs) less wealthy or less interested in commercial real estate investing. The amount of wealth held by HNWIs rose by about 8 percent, or $6.4 trillion, around the world last year, and the number of HNWIs grew by 1.7 million, with half of them living in North America.
Private equity real-estate investments from HNWIs are a transpiring reality, and in many such investments over the last decade, HNWIs have reaped the benefits of such investments. The goal of an HNWIs portfolio is not just to make money and get good returns. Sure, maybe return is everything for stocks.
However, the investor’s whole portfolio should meet all of their needs and wants as well as possible. Managing risk, volatility, legacy, liquidity, wealth generation, and economic and policy issues are often other top priorities.
While private equity real estate fits the bill for residential and investment purposes, it is also pivoted in terms of its role in family wealth management as well. After insurance and trusts, real estate investment is the third most common way for people to pass on their wealth.
Indeed, every aspect of the investment class has its pros and cons, and in the case of private equity investments too, the opportunities for wide-scale investments, diversifying the real-estate investments itself into multiple opportunities basis the private equity real estate stands true.
Wealth generation and passive income stand a reality in private equity real estate investments upon choosing the reputed real estate investors and developers for the association. Some of the main reasons why HNWIs can be interested in private equity real estate investments are to diversify, protect against inflation, and save money on taxes.
As investments that don’t go hand in hand with each other, alternatives like private equity investments in real estate are a great addition to a portfolio for growth and a hedge against inflation. However, it is important to be wary of the risks that could go wrong.
One should choose the investments in terms of risk awareness towards liquidity, type of investments, and the credibility of the real-estate developers partnering for the private equity investment.
Now, is the opportunity for timing the investments into private equity investments in the twilight need for inflation hedging and yielding returns from the emerging opportunities.
Reach out to 33 Holdings for more information on the scope of private equity real estate investment opportunities.