media releases
Study on alternative investments and private assets among Swiss investors
- A Lombard Odier study of 300 Swiss high-net-worth individuals (HNWIs) has revealed that 42% of investors have increased their allocation to alternative investments and private assets
- Just 24% of investors in French-speaking Switzerland believe that private assets can provide downside protection during financial market turbulence, compared to 43% in the German-speaking part
- Private assets have frequently recorded double-digit performance over the last 20 years. Almost two thirds of respondents under the age of 35 expect higher returns from this asset class compared to traditional stock market investments.
A recent survey of 300 Swiss high-net-worth individuals (HNWIs) conducted by Lombard Odier, has revealed that the share of investments in private assets is steadily growing in the current market environment. In addition to private equity, the unlisted asset class encompasses private debt, infrastructure investments and certain types of real estate. 42% of respondents said that their priority was to increase their allocation to alternative investments, with the aim of improving portfolio diversification.
The survey findings indicate that the share of private assets within Swiss HNWI portfolios is set to rise significantly between now and 2025. At present, just one third of respondents hold more than 10% of their portfolios in private assets. 66% of younger investors (under 35) plan to increase their allocation, whilst the equivalent figure for the 35–50 age bracket is also over half (57%).
One of the main factors behind the growing popularity of private assets is the greater potential returns they offer, along with downside protection. More than a third of Swiss HNWIs believe that private assets deliver better returns than traditional equities, and this proportion is even higher among under 35s (63%). Younger investors also think that private assets can provide downside protection during periods of market turbulence. This view diminishes with age, as older investors tend to be more loyal to traditional financial markets.
Differences according to location are also evident. Investors in German-speaking Switzerland are more likely than their French-speaking counterparts to have increased their allocation to private assets (57% versus 33%). The same applies to expectations of downside protection during financial market turbulence, a conviction that is less strong in French-speaking Switzerland than in the German part: just 24% of French speakers believe that private assets can help protect against market downturns, whilst in German-speaking Switzerland the figure is considerably higher (43%).
“The latest survey indicates a marked interest in private assets. The regional and generational differences may seem surprising: it is therefore essential to take this into account in our advisory activities, and to offer personalised solutions,” comments Gérard Felley, Limited Partner and Head of Swiss and Francophone Private Client Markets at Lombard Odier.
The younger generation values a direct connection to the real economy
Swiss investors’ growing interest in this asset class also reflects a shift that is taking place within the financial world: “value is increasingly being generated outside traditional financial markets, with many companies no longer aspiring to go public.”
This trend is reflected in the desire of younger investors to “participate in the real economy”. Overall, 40% of the Swiss investors surveyed said that they feel connected to the real economy through their investments in private assets, with only 8% disagreeing.
Demands on banks are increasing
The survey also examined where investors obtain advice and information regarding their investments, and revealed that banks remain the preferred partner for private asset investments. 53% of respondents said that professional advice from private banks or financial advisors was the most important and reliable source of information. Networks are also widely used: nearly a third (28%) of respondents consult their personal networks, while 15% draw on their professional networks.
“It is critical that banks and financial advisors not only have expertise in the different segments of this asset class, i.e. private equity, private debt, infrastructure and real estate, but also understand and are a part of their clients’ entire financial and personal ecosystem. This will allow them to identify their clients’ needs, anticipate market trends and provide the best possible advice,” explains Andreas Arni, Member of the Executive Committee Private Banking at Lombard Odier Switzerland.
Survey methodology
An online survey of 300 wealthy Swiss individuals (HNWIs) with invested assets of at least CHF 1 million was conducted between December 2022 and January 2023. 40% of those surveyed lived in German-speaking Switzerland, 58% in French-speaking Switzerland and 2% in Ticino. 40% of respondents were in the 35–50 age group, and 47% were aged between 50 and 70.
Important information
This media release has been prepared by Bank Lombard Odier & Co Ltd, a bank and securities dealer authorised and regulated by the Swiss Financial Market Supervisory Authority (FINMA) (hereinafter "Lombard Odier"). It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful, nor is it aimed at any person or entity to whom it would be unlawful to address such a document. This media release is provided for information purposes only. It does not constitute an offer or a recommendation to enter into a relationship with Lombard Odier, nor to subscribe to, purchase, sell or hold any security or financial instrument.
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