At the recent Reuters Next conference, Blythe Masters, Founding Partner of Motive Partners and Forge Board member, discusses the macro-economic drivers of today’s capital markets and the potential opportunity for private wealth in alts and private securities.
Well, I think the place to start is that the trend that we're talking about is very much a structural long-term trend, which is the growth in scale of private capital markets. That's not a cyclical phenomenon that's going to evaporate. To put some sort of quantum around that, I looked up some stats this morning.
And if you look at global total invested wealth, it's about $340 trillion presently. And of that, about $19 trillion is allocated to alternatives. The average institutional allocation to alts, of which private securities is a subpart, is about somewhere between 15% and 20%. Let's call it 16% today.
The average allocation by individual or private wealth is in the low single digits. Call it 2% or 3%. There's no reason other than the access problem that you just described in some detail for that significant discrepancy. Implied in those statistics is about a $60 trillion plus under-allocation to alternatives by private wealth. So, that's a phenomenal entrenched long-term structural growth trend that your thesis lies squarely at the center of.
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