Research has uncovered an emerging investment paradigm where private market investments are evolving from specialised alternatives to core portfolio components.
According to private market investing platform Yieldstreet, this shift is particularly pronounced among investors using digital investment platforms, who demonstrate distinct preferences across asset classes and higher adoption rates of diversified private markets strategies.
The research, published in the firm’s The Next Wave report today, surveyed nearly 400 individual investors and industry experts.
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Nearly two-thirds (64 per cent) of retail investors with over $1m (£793,333) in investable assets cite diversification as their primary motivation for private markets investing.
Yieldstreet’s research into how retail investors approach and invest in private market opportunities also found that 53 per cent used private markets investment for higher yield generation, while 27 per cent did so for reduced correlation with public markets.
It found that 59 per cent of direct-to-customer private market investments are funded through brokerage accounts (37 per cent from online platforms, 22 per cent from traditional full-service firms), with the remaining 41 per cent sourced from savings and checking accounts.
This reallocation suggests a shift in how individual investors are approaching portfolio construction and diversifying between their public and private markets portfolios.
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Digital platform users demonstrate different investment preferences, particularly in infrastructure, where interest reached 22 per cent compared to 8 per cent among non-users.
Yieldstreet suggests that new and broader access to private market investments may reshape investor preferences, as investors explore asset classes, they might not have previously prioritised.
“As financial firms rush to bring private markets to self-directed affluent retail investors, we wanted to challenge common assumptions about this audience — including our own,” said Michael Weisz, founder and chief executive of Yieldstreet.
“What we found is that when provided access to private markets, investors are actively diversifying between their public and private market accounts to make sophisticated investment decisions across asset classes. The platforms that succeed will be those that deliver the intuitive, digital experience investors have come to expect, paired with institutional-calibre opportunities – enabling them to build diversified portfolios over time.”
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