Independent financial advisers (IFAs) and wealth managers are planning to increase their clients’ exposure to private markets, Wealth Club has found.

The investment services firm's latest survey revealed that IFAs and wealth managers are starting to favour private markets due to global stock market volatility, consistently attractive returns and a recent lack of initial public offerings.

Wealth Club added that the main private markets that intermediaries expect to recommend are private equity, real estate, venture capital, private debt and infrastructure.

The survey of IFAs and wealth managers working for firms managing £75.8bn in assets for clients revealed that 41% of those surveyed expect inflows from investors into venture capital to rise from 5% to 10% in the next five years, compared with the previous five-year period.

Almost two in five (38%) said they predicted the same increase in investor cash being funnelled into private debt and infrastructure, while 19% predicted an increase of between 50% and 75%.

Furthermore, 87% of IFAs and wealth managers are expecting stock market volatility to increase slightly over the next 12 months, while 9% believed there will be a drastic increase in volatility.

Meanwhile, just 4% thought that the current volatility situation will remain the same over the next 12 months.

Founder and chief executive at Wealth Club, Alex Davies, stated: "The shifting sands of global stock market volatility is driving investors towards more stable assets, our research reveals.

"Returns from private markets can be reasonably uncorrelated with this global uncertainty, so it is clear why IFAs and wealth managers consider these a no-brainer for some of their sophisticated and high net worth individual investors. With more and more companies delisting from stock markets or staying private for longer it also gives them a far greater investment pool from which to choose."

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