The alternative investment market in Asia is growing exponentially. According to the “Alternative Assets in Asia-Pacific” report published by Preqin in June, private capital assets under management (AUM) are on course to reach US$6 trillion ($8.2 trillion) by 2025.
Following peaks in policy support and growth, the market is transitioning into a mid-cycle environment where increased volatility and stretched valuations can be expected. Against this backdrop, investors should think about gaining exposure to alternative investments to offset the volatility, says James Cheo, Southeast Asia CIO of HSBC Private Banking and Wealth Management.
“In this scenario, investors should have a bias for quality companies as returns are harder to come by. They should also adopt a more resilient, diversified portfolio which includes alternative investments such as private equity, private credits or hedge funds which can help to offset any volatility that would rise in the months ahead,” says Cheo.
