Diversified Private Markets – A source of illiquidity premiums

Negative cash flows, pressure to diversify risk exposures, stricter investment regulations – institutional investors are facing many issues.

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Investing in private markets enables institutional investors to meet their demand for sustainable assets.

This article was produced by BNP Paribas Asset Management as part of their valued industry partnership to Insurance Investor.

Julien Halfon, Head of Pensions and Corporate Solutions at BNP Paribas Asset Management, discusses where attractive alternatives can be found.

One way to improve the risk/return profile of institutional portfolios is to capture the credit and/or equity illiquidity premiums by investing in diversified private debt and private equity portfolios.

Additionally, investing in private markets enables institutional investors to meet their demand for sustainable assets by directly accessing greenfield and brownfield, senior and junior, and developed and emerging market green assets. Increasingly, institutional investors are seeking not just such ESG oriented assets, but they also want to climate-align their portfolios to the Paris Agreement.

Read full article here.