Size matters
However, with smaller portfolios and resources, it may only be the larger not-for-profits that make significant allocations to private markets.
The survey found that organizations with portfolios of US $1 billion or more are more likely to be invested in private markets (86%) compared with those with less than US $250 million (40%).
Lacking the resources to invest in private markets (55%), complexity of investment vehicles and instruments (46%), and higher fees (43%) are cited as reasons for not investing in private markets.
Respondents also said that the asset manager selection process is too complex, although 55% are using outsourced chief investment officers to help them navigate private markets.
“The survey is consistent with what we hear from our clients every day – complexity can make it challenging for Not-for-Profits to implement private markets efficiently,” said Rich Nuzum, Mercer global president of investments and retirement. “High fees, illiquidity, and ESG integration objectives all compound the challenge. As clients navigate this uncertainty, they are seeking out advisors with a customized service approach and global research capabilities at scale to deliver the breadth and depth of coverage they need.”
