How to invest like a rich person amid market volatility
The wealthy are increasingly seeking investment opportunities that offer less correlation to the public equity markets that have long dominated their portfolios. That search has taken on new urgency following renewed market turbulence in the wake of the Trump administration's April 3 tariff announcements. While shifting towards bonds and cash equivalents provides a degree of insulation, it often comes at the expense of meaningful returns.
A growing cohort of family offices and sophisticated investors are now reallocating capital towards private assets — a broad universe that includes private equity, private credit, real estate, infrastructure, and venture capital. These markets have expanded dramatically over the past decade. According to the Economist, private assets under management have surged to $24 trillion (Dh88 trillion) from $10 trillion (Dh36 trillion) a decade ago.
That trajectory shows no sign of slowing. Bain & Company estimates that private market AUM will rise to between $60 trillion and $65 trillion by 2032. If realised, private assets would represent nearly one-third of global investable capital — more than twice the projected growth rate of public markets.
The Rise of Private Credit
Among the most striking growth areas is private credit. Once a niche segment of the market, it has grown tenfold since 2009, with AUM approaching $2 trillion by the end of 2023, according to McKinsey. As traditional banks retreat from corporate lending, the wealthy have stepped in to fill the void — drawn by the promise of attractive yields in a persistently low-rate environment.
Fewer Public Listings, More Private Opportunity
This structural shift is occurring alongside a broader decline in public market participation. The number of publicly listed companies globally fell from 62,959 in 2018 to 61,170 by the close of 2024. The US trend is even more pronounced: listed firms have declined from a 1996 peak of 7,300 to just 4,300 — a drop of more than 40 per cent.
A combination of regulatory burden, increased merger activity, and the abundant availability of private capital has made remaining private an increasingly attractive option. Consequently, an estimated $2.6 trillion in 'dry powder' — capital raised but not yet deployed — now sits on the sidelines, ready to be invested.
From the Magnificent Seven to Emerging Growth
For forward-looking investors, the appeal of private markets lies not only in diversification but also in early access to the next generation of growth. Sectors such as Artificial Intelligence, climate technology, and biotechnology often reach scale long before entering the public arena. Many HNWIs are now looking beyond the overstretched valuations of publicly listed giants — the so-called 'Magnificent Seven' — to back tomorrow's innovators earlier in their life cycle.
Market-Leading Private Asset Products
Firms such as Blackstone and KKR have emerged as leading providers of private market access for qualified investors. Examples of a selection of key offerings include:
Blackstone Private Equity Strategies Fund (BXPE): Launched in 2024, this non-listed evergreen fund offers individual investors access to Blackstone's flagship private equity platform. Sector exposures include digital infrastructure, technology, business services, financials, and aerospace.
Blackstone Private Credit Fund (BCRED): Launched in 2021, it is a direct lending vehicle that targets middle-market companies in the US. BCRED provides a scalable entry point into the fast-growing private credit space.
Blackstone Real Estate Income Trust (BREIT): A pioneering launch in 2017, this is a non-listed REIT that offers exposure to income-generating, institutional-grade real estate.
Blackstone Mortgage Trust (BXMT) : A publicly listed real estate investment trust focused on originating senior loans secured by commercial real estate assets.
Similar offerings are available from other global private asset managers, including Apollo, Carlyle, Partners Group, and Brookfield.
The SLY Trade-Off: Safety, Liquidity, Yield
Investors entering private markets must carefully consider what might be called the 'SLY' triangle — Safety, Liquidity, and Yield. Typically, optimising for one requires trade-offs with the others. The pursuit of high yield, for example, often entails reduced liquidity and higher risk exposure.
For investors accustomed to daily liquidity and mark-to-market transparency, the realities of private markets — multi-year lockups, irregular capital calls, limited secondary market access — can be sobering. Fees also tend to be high, with incentive structures that may not always align with investor interests.
Valuation presents another risk. Unlike public assets, private investments are typically valued on a quarterly basis — and often by the fund managers themselves. This creates both opacity and potential conflicts of interest that can be unsettling for those new to the asset class.
Proceeding with Caution — and Conviction
Given these complexities, financial advisors routinely urge the wealthy to approach private markets with caution and purpose. Allocations should reflect each investor's liquidity needs, investment horizon, and risk appetite — and remain a portion of a well-diversified portfolio.
For those prepared to navigate the illiquidity, complexity, and longer time horizons, private assets offer more than just higher potential returns. They offer enhanced risk-adjusted returns, particularly in an era of volatile public markets and fading alpha.
Private markets are no longer the preserve of institutional behemoths. But accessing their full potential requires the same level of discipline, due diligence, and long-term perspective.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The National
8 hours ago
- The National
Opec+ agrees another accelerated oil output for July
Opec+ has agreed to maintain its monthly oil output of 411,000 barrels per day for July, as it boosts supply amid trade tension-induced economic uncertainty. Analysts say the move is a possible gesture to appease US President Donald Trump's desire for lower crude prices. The hike marks the third consecutive month that the group, led by Saudi Arabia and Russia, will raise production at the same level, Opec+ said in a statement following a virtual meeting on Saturday. The decision was "in view of a steady global economic outlook and current healthy market fundamentals, as reflected in the low oil inventories", the group said. Opec+ noted that gradual increases may be paused or reversed "subject to evolving market conditions", giving them the "flexibility will allow the group to continue to support oil market stability". The accelerated unwinding of Opec+'s own restriction programme is expected to boost the market's supply surplus into the second half of 2025 "when demand prospects are fragilised by trade tensions", Ipek Ozkardeskaya, a senior analyst at Swissquote Bank, told The National. Mr Trump, meanwhile, has repeatedly called for lower oil prices to boost the domestic US oil industry. "We don't yet know if Opec+'s latest moves are to please Mr Trump or to [align] certain members" with the group's quotas, Ms Ozkardeskaya said. "Yet the rising supply will likely continue to apply negative pressure on prices – unless there is a sudden shift in the tariff picture like ruling of the tariffs." Oil prices started 2025 strongly. The closing price of Brent, the benchmark for two thirds of the world's oil, peaked at more than $82 a barrel on January 15, while West Texas Intermediate, the gauge that tracks US crude, hit almost $79 per barrel also on that day. However, crude prices have since waffled and have been particularly jolted by Mr Trump's sweeping global tariffs that he announced on April 2, which have disrupted stock markets and reignited fears of a global recession, especially as US trade partners – most notably China – unleashed retaliatory levies. Since then, Brent and WTI have slipped more than 16 per cent and 15 per cent, respectively, and the uncertainty surrounding Mr Trump's flip-flopping over his tariff policies have put pressure on oil prices. In March, Opec+ said it would proceed with a 'gradual and flexible' unwinding of voluntary production cuts of 2.2 million bpd starting in April, adding 138,000 bpd per month until September 2026. The planned return of production cuts – originally made by eight Opec+ members, including Saudi Arabia, Russia, the UAE and Iraq, in November 2023 – had been pushed back several times amid concerns about growing supply in the market. In March, the alliance released a new schedule for seven member nations to make further oil output cuts to compensate for exceeding their quotas. The plan includes monthly cuts ranging from 189,000 bpd to 435,000 bpd, with the reductions scheduled to last until June 2026. Opec has been losing global market share in recent years. In 2024, their output was less than 27 million bpd, down from 30 million bpd a decade ago and after having peaked of 34 million bpd in 2016. "In addition to trying to enforce stronger discipline within the group, Opec sees [increasing output] as a good opportunity to place pressure on higher cost oil producers, including US shale, and win back some market share," analysts at Jadwa Investment said. "This policy has the added benefit of bolstering good relations with the US given President Trump's stated desire for lower oil prices to bring down inflation in the US and force a diplomatic solution to the Russia-Ukraine war." How Opec+ policy evolves during 2025 will largely depend on internal compliance issues and the broader developments in the oil market, with hikes seen to scale down should global crude inventories start to build up, they added. The UAE's Minister of Energy and Infrastructure, Suhail Al Mazrouei, this week said Opec+ should be 'mindful' about oil demand, and that the group is 'doing their best' to balance the market and ensure there is enough investment into the supply. Mr Al Mazrouei's comments are "constructive", said Giovanni Staunovo, a strategist at Swiss bank UBS. "Opec+ crude exports are stable versus April, suggesting higher compliance and domestic demand keeps exports in check," the told The National. At its ministerial meeting on Wednesday, Opec reiterated its "continued commitment ... to achieve and sustain a stable oil market".
Khaleej Times
9 hours ago
- Khaleej Times
'Tears of joy': Taylor Swift finally gains control of her entire music catalogue
Pop superstar Taylor Swift said on Friday she had purchased the master recordings of her first six albums, giving her control of all of her music after a dispute with her former record label. Swift's masters had been sold in 2019 and the singer said she was not given the opportunity to buy them at the time. She re-recorded four of the albums with the subtitle "Taylor's Version." Swift purchased the original recordings from current owner Shamrock Capital in what she called her "greatest dream come true." No financial terms were disclosed. "I've been bursting into tears of joy at random intervals ever since I found out this is really happening," she said in a statement on her website. "I really get to say these words: All of the music I've ever made ... now belongs ... to me." The 'Fortnight' singer also said she had re-recorded her 2006 self-titled debut album and parts of 2017 release 'Reputation'. She said she would release them "when the time is right, if that would be something you guys would be excited about." Swift has won 14 Grammys, including an unprecedented four trophies for album of the year, and recently completed the highest-grossing concert tour of all time. The 35-year-old singer recorded her first six albums, which included hits such as 'Shake It Off' and 'You Belong With Me', with Big Machine Label Group before leaving in 2018 for Universal Music Group Music executive Scooter Braun bought Big Machine in 2019 and Swift publicly accused him of bullying her and refusing to give her a chance to purchase her original recordings. Swift said in 2020 that BMG had sold her music to Shamrock. Media reports at the time said the deal was worth more than $300 million. Representatives for Braun did not immediately respond to a request for comment. Swift praised executives at Shamrock, founded by Walt Disney's nephew Roy E. Disney, as being "honest, fair and respectful." "My first tattoo might just be a huge shamrock in the middle of my forehead," she joked.
The National
12 hours ago
- The National
Markets feel heat as Trump claims China broke trade deal
Stock markets ended the week mixed, reversing rallies on Friday after US President Donald Trump accused China of 'totally violating' their trade deal, reigniting tensions that had simmered down after a detente three weeks ago. Mr Trump, in a post on his Truth Social platform, said US levies made it 'impossible' for China to trade with the US, and that the 'fast deal' was struck to prevent a 'very bad situation' for Beijing. US Trade Representative Jamieson Greer said China was 'slow-rolling' its compliance with the agreement, particularly on minerals and rare earth magnets. The US and China, the world's two biggest economies, have been the main protagonists in the trade war, with Washington imposing 145 per cent tariffs on Chinese imports. Beijing responded in kind, posting 125 per cent levies on American imports. However, on May 12, the White House announced that both sides struck a surprise deal to suspend their tariffs for 90 days, with the US and China lowering their levies to 30 per cent and 10 per cent, respectively. Mr Trump's latest tirade jeopardises their progress. China hit back at the US, with its embassy in Washington saying it had been in constant contact, particularly concerned about trade controls in semiconductors and 'other related practices'. 'China once again urges the US to immediately correct its erroneous actions, cease discriminatory restrictions against China and jointly uphold the consensus reached at the high-level talks in Geneva,' embassy representative Liu Pengyu said in a statement. After stock markets closed on Friday, Mr Trump poured more fuel on the trade tensions fire by threatening to double steel and aluminium imports to 50 per cent, which he claims is another part of his strategy to protect American industry. Shortly after making that announcement at a US Steel factory in Pennsylvania, Mr Trump wrote on Truth Social that the higher levy will come into force on June 4. That capped a whirlwind week for his grand tariff plans. On Thursday, the New York-based Court of International Trade blocked his tariffs, saying he exceeded his authority. But on Friday, a federal appeals court temporarily upheld his actions. Josh Gilbert, market analyst at eToro, said that while the appeals court has allowed tariffs to stay for now, the legal battle is far from over. 'The White House is taking its case to the Supreme Court and weighing other legal options, which, to be frank, are unlikely to be quick or straightforward. This uncertainty adds yet another layer of risk for investors. 'What we're seeing is just another example of today's current market conditions and how news flow, especially from a political standpoint, is injecting volatility into markets. 'Whether you've been investing for 10 weeks or 10 years, this is a tricky market to navigate. This constant policy whiplash is beginning to leave investors sore … diversification and a clear strategy remain the best tools for navigating this policy-driven turbulence.' At the close on Wall Street on Friday, the Dow Jones Industrial Average ended 0.1 per higher, while the tech-heavy Nasdaq Composite shed 0.3 per cent. The S&P 500 was almost flat. For the week, the S&P 500 added 1.9 per cent, the Dow gained 1.6 per cent and the Nasdaq climbed 2 per cent. Year-to-date, the S&P 500 is up 0.5 per cent, while the Dow and Nasdaq are down 0.6 per cent and 1 per cent, respectively. In London, the FTSE 100 ended more than 0.6 per cent higher, as trade remained stable despite uncertainty triggered by the latest in the tariffs saga. Paris' CAC 40 retreated 0.4 per cent, while, Frankfurt's DAX added 0.3 per cent. Earlier in Asia, stock markets reversed gains to end lower. Tokyo's Nikkei 225 and Hong Kong's Hang Seng index were both down 1.2 per cent, while the Shanghai Composite retreated 0.5 per cent. In commodities, oil prices slipped and posted a second consecutive weekly decline as the Opec+ alliance prepares for its meeting on Saturday, where it is expected to announce its third major output increase. Brent fell 0.39 per cent to settle at $63.90 a barrel, while West Texas Intermediate dropped 0.25 per cent to close at $60.79 a barrel. Gold, meanwhile, inched down at the close on Friday, as the market absorbed the tariff drama and the dollar moved higher. The precious metal, a hedge against inflation, was down nearly 1 per cent to $3,289.57 an ounce.
