Private markets, once the preserve of institutions and the ultra-wealthy, are slowly opening their doors to individual investors. The latest sign of this quiet revolution comes from Wealth Club, the UK’s largest non-advisory investment service for tax-efficient and private market investments.
According to new research by the firm, interest among sophisticated investors in secondary investments — or “secondaries” — is growing rapidly as they seek exposure to private equity with potentially lower risk and faster liquidity.
What are secondary investments?
Secondaries are, in essence, the resale market of private equity. Rather than committing capital to a new ten-year private equity fund and waiting patiently for exits, investors in secondary funds buy existing stakes from others who want out earlier. These may be holdings in private equity-backed businesses, venture capital funds, infrastructure vehicles, or real estate partnerships.
The appeal is straightforward: a more diversified portfolio, a shorter investment horizon, and a chance to enter at a discount — since sellers are often motivated to cash out before the fund matures.
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For investors weary of waiting a decade for returns, secondaries offer a pragmatic halfway house between liquidity and long-term growth.
Global appetite for secondary investments has surged
The global appetite for these transactions has surged. Worldwide secondary market volumes reached $162 billion last year, according to Wealth Club’s analysis, representing a 45 per cent increase on the previous year. This year, that figure is expected to surpass $175 billion — an astonishing rise for what was once a niche corner of finance.
Among Wealth Club’s own clients, enthusiasm is unmistakable. Nearly half (45 per cent) of respondents to its survey said they were very or quite likely to consider investing in secondaries. Just over two-fifths (41 per cent) said they were not particularly inclined, while 14 per cent remained undecided. These numbers suggest a market at an inflection point: curiosity is growing, but conviction is still forming.
Interest in semi-liquid private markets funds (a related innovation) is even stronger. These are open-ended vehicles that give investors periodic redemption windows, a kind of middle ground between the total lock-up of traditional private equity and the daily liquidity of listed funds. Almost two-thirds (63 per cent) of respondents said they have already invested or would consider investing in such semi-liquid structures. Fifteen per cent were uninterested, and a further 22 per cent were unsure.
This trend reflects a broader rethinking among Britain’s high-net-worth individuals. In an era of low yields, volatile public markets, and creeping inflation, the allure of private assets, from venture capital to infrastructure, is obvious.
Real assets are in vogue
Wealth Club’s study found particularly strong appetite for real assets such as property, renewable energy, and infrastructure projects, with around 60 per cent of respondents saying they were very or quite likely to invest. These assets, many of which benefit from inflation-linked revenues or government-backed guarantees, offer a measure of protection against the vagaries of the public markets.
For Alex Davies, founder and chief executive of Wealth Club, the message is clear:
“Sophisticated individual investors are increasingly open to different types of investments, as demonstrated by their interest in secondaries. Transaction volumes in the sector are growing, and that is opening up more opportunities for individual investors who typically struggle to access opportunities in private markets funds.”
Wealth Club has positioned itself to capture this momentum. Its platform — which last year launched the UK’s first investment supermarket for semi-liquid private market funds — now offers access to 13 funds from ten global managers, with minimum investments starting at £10,000. That may still sound exclusive for some, but in the world of private equity, it represents a considerable lowering of the drawbridge.
In short, the secondaries boom is not just a story of financial engineering, it is a story about access. For a generation of affluent investors tired of the stock market’s drama and wary of inflation’s erosion, the private markets once sealed off to institutions are becoming, if not democratic, then at least open for business.
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