World's wealthy turn to private equity

The world's wealthiest families put more money into private equity than in traditional asset classes like fixed income and stocks in 2021 as they sought to boost investment returns, a report by Swiss bank UBS shows.

Private equity posted stellar returns last year as trillions of dollars in pandemic-related stimulus prompted a record surge in deal-making, with overall deal value in 2021 doubling from previous years, according to industry estimates.

In contrast, fixed income faced a torrid year as near zero interest rates sapped its attractiveness as a safe haven during market turmoil, while sky-high valuations in volatile equity markets deterred investors.

Investments into private equity by the world's wealthiest families increased consistently between 2019 and 2021, according to a survey for the UBS report of 221 family offices overseeing US$493 billion (HK$3.9 trillion) in assets.