A survey of 200 institutional investors worldwide found that growth capital is the biggest focus of those looking to up their exposure to private capital markets.

Commissioned by investment bank Numis, the survey had 71% of those surveyed indicating they intended to increase their exposure to private markets, including private equity and venture capital, in the next five years.

Over the initial next three years, 73% said they would increase their allocation to and invest in high growth private companies.

Numis said that when asked why they were increasing their focus on growth capital, 65% of the institutional investors said it was because they had greater comfort in investing in illiquid, longer-term assets, while 61% said it was because attractive companies are remaining private for longer.

The investors surveyed had a $4.5trn assets under management between them. Currently 38% have 10% or more of their funds in private markets, but the survey pointed to that figure rising to nearly half (45%) by 2030.

Just over two-thirds (67.5%) of the investors have 5% or more of their assets allocated to private capital, with the outlook for that to rise to 75% by 2030, according to Numis.

The survey also asked investors about their governments to make it easier for pension schemes to invest in unlisted companies, with nearly nine in 10 respondents (86%) expecting regulatory changes to facilitate greater allocations to private markets over the next three years.

Numis said that in Europe today, pension funds contribute around 18% of venture capital and growth equity funds, and 71% of institutional investors expect this to grow over the next three years. One in eight is anticipating a dramatic increase, according to the survey.

Alex Ham, co-chief executive officer at Numis, noted that private market investment has grown six-fold in the last decade, and the number of $1bn+ ‘unicorns’ has increased 10-fold.

The investors that were surveyed were from across the UK, Europe, Asia, South America, The Middle East and Israel. Interviews were conducted online during September 2021.

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