suggests . Around 76 % of advisors in the survey said their clients see that private funds can provide a higher reward than stocks and bonds because of their performance and diversification attributes , the report found .

“ From a return standpoint , advisors think that their clients will get more reward out of the private markets than they will out of stocks and bonds ,” Brennan says .

Around 76 % of advisors in the survey said their clients see that private funds can provide a higher reward than stocks and bonds .

That ’ s an increase from last year , when 45 % of surveyed advisors said they planned to surpass the 10 % allocation mark , the company says .

The Conshohocken , Pa . -based private markets investment firm interviewed more than 300 advisors and found 30 % said they plan to allocate 20 % or more of their client ’ s portfolio to the private markets in the coming year , while 29 % said they will allocate 10 % or more .

Two things are occurring to facilitate this rise in interest , according to Stephen Brennan , head of private wealth solutions at Hamilton Lane .

“ The number of options has increased significantly , and then the effort on the part of the investment managers ... to educate the financial advisory community on the benefits of the private markets has increased significantly as well ,” he says .

Investors are beginning to perceive the benefits of these investments , the survey

Seventy percent of advisors said helping clients invest in private markets deepens the relationships they have with clients . Private assets tend to be held longer , which means clients stay with their advisors longer , Brennan says , adding that private market investment access also allows advisors to differentiate themselves .

The survey further found that private infrastructure investments attracted the most interest from advisors , with 48 % saying they plan to increase their exposure to that sector . Advisors also expressed interest in private equities , private credit and private real estate .

The survey results indicated that advisors ’ understanding about private markets is increasing ; 63 % rated their knowledge of the asset class as “ advanced ,” up from 55 % last year .

— Edward Hayes

“ For nearly three years , RIA M & A activity remained at a plateau ,” said the firm ’ s CEO , David DeVoe , in the report . “ A blockbuster fourth quarter pushed 2024 to a new highwater mark .”

Several key trends were cited as drivers of 2024 ’ s M & A activity . First were the interest rate cuts that began in September . “ The cheaper cost of capital , implications on debt ratios , and expectation of more cuts to come resulted in debt-heavy acquirers loosening their purse strings ,” the report said . Second , post-election market gains buoyed valuation expectations , further spurring acquisition activity .

A third factor , the report said , is what it referred to as “ a succession crisis .” Just 20 % of advisors believe their next-generation leaders can afford to buy out current shareholders , which is down from 38 % four years ago , and that may be pushing firms to seek external buyers .

At the same time , private equity and private-equity-backed firms were “ consistently involved in a significant majority of all transactions ” in 2024 , the report said , especially in the fourth quarter . Private equity firms were directly or indirectly involved in a record 78 % of all RIA transactions during that quarter , a significant jump from the 69 % share they had in the first three quarters of the year .

— Ben Mattlin

MARCH 2025 | FINANCIAL ADVISOR MAGAZINE | 15