Eighty-six percent of private equity firms expect alternative investments to dominate retail portfolios in the next five years, says Apex Group
The latest research highlights growing retail demand for private markets and the role of technology in shaping the future of investment
Global, 25 February 2025
Apex Group, the leading global asset servicing provider, has launched a new report revealing 97% of asset managers see a strong retail interest in private markets, with private equity and real estate leading the demand.
The research paper called “Leading the shift: Transforming private markets in a retail-driven landscape,” was carried out by Global Custodian – an international securities services title. It is based on insights from senior leaders in funds with assets under management ranging from under $1bn to over $50bn; and explores how increasing retail investor engagement, technological advancements, and evolving industry strategies are reshaping the future of private markets.
Key findings of the report:
- Retail demand on the rise: 97% of asset managers report strong or moderate retail interest in private markets, with private equity (67%) and real estate (55%) leading demand. Retail interest is expected to dominate alternative investments in retail portfolios within the next five years (86%).
- Technology and innovation: The role of technology is critical in driving the retail shift. Almost 70% of asset managers see digital platforms as key enablers of retail participation, while 58% highlight blockchain and tokenisation as game-changing technologies for private market distribution.
- Barriers to retail participation: Regulatory restrictions (59%) and liquidity concerns (43%) are identified as the top barriers to retail investor participation.
- Outsourcing and lift-outs: 76% of firms have embraced outsourcing, with cost efficiency (70%) and time savings (71%) cited as the top benefits. Additionally, 65% of firms have engaged in lift-outs, transitioning in-house functions to third-party providers to drive better technology solutions and specialized talent.
Peter Hughes, founder and CEO of Apex Group, said:
“These findings underscore the major shift we’re witnessing in private markets as retail investors are now driving significant demand across alternative asset classes such as private equity and real estate. Apex Group is at the forefront of this trend, helping alternative managers and retail investors interact digitally using innovative solutions that are also seamlessly linked to traditional asset servicing.”
The report is based on insights from 117 senior executives, including c-suite leaders, portfolio managers, and finance directors at global asset management firms. The study captures perspectives from major financial hubs, including the US, UK, Hong Kong, and Singapore, and offers a comprehensive analysis of the factors driving the transformation in private markets.
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Notes to editors
- To access the full report, please visit: https://www.apexgroup.com/reports/transforming-private-markets-in-a-retail-driven-landscape/
Apex Group is dedicated to driving positive change in financial services while supporting the growth and ambitions of asset managers, allocators, financial institutions, and family offices. Established in Bermuda in 2003, the Group has continually disrupted the industry through its investment in innovation and talent.
Today, Apex Group sets the pace in fund and asset servicing and stands out for its unique single-source solution and unified cross asset-class platform which supports the entire value chain, harnesses leading innovative technology, and benefits from cross-jurisdictional expertise delivered by a long-standing management team and over 13,000 highly integrated professionals.
Apex Group leads the industry with a broad and unmatched range of services, including capital raising, business and corporate management, fund and investor administration, portfolio and investment administration, ESG, capital markets and transactions support. These services are tailored to each client and are delivered both at the Group level and via specialist subsidiary brands.
The Apex Foundation, a not-for-profit entity, is the Group’s passionate commitment to empower sustainable change.
KYC and Adverse Media Screening: What Risks are Lurking in the Shadows?
By Steve Marshall, Director, Advisory Services, FinScan, an Innovative Systems Solution
In the ever-evolving world of business risks, Know Your Customer (KYC) remains the cornerstone of uncovering reputational and financial harm that may occur in the future. But as information sources become increasingly diverse KYC verification methods might not be enough, and “set it and forget it” doesn’t work anymore. Enter adverse media screening—KYC’s secret weapon for uncovering hidden risks and bolstering your anti-money laundering (AML) defenses.
Adverse media screening is all about avoiding risky business relationships. But it’s not always easy. With the flood of information out there, not only can the initial process feel like finding a needle in a haystack, but continuous monitoring can be overwhelming. Luckily, technology is stepping in to make the process smoother and more effective.
Adverse media screening: shining a light on customer risk
Imagine a customer who passes all the standard KYC checks: ID verified, address confirmed, source of funds seemingly legitimate, etc. Yet, beneath the surface lurks a direct or indirect web of past financial or criminal misconduct documented only in news articles. Adverse media screening steps in, systematically scanning a vast array of sources—news websites, regulatory databases, public records—to unearth negative information that traditional KYC checks might not capture as customers don’t self-report. This may include:
By uncovering such red flags, adverse media screening offers invaluable insights into a customer’s true risk profile, empowering firms to make informed decisions.
Adverse media screening also helps organizations comply with international sanctions regimes, as they may assist in identifying individuals or entities that are in some way related to the customer or transaction. Those individuals or entities may be sanctioned and, therefore, may impact the risk associated with the customer or transaction. Both the Financial Action Task Force (FATF) and the Office of Foreign Assets Control (OFAC) advocate for these searches as an effective approach to managing risks in this domain.
The challenges of adverse media screening
Adverse media screening sounds simple, right? Just check the news for anything shady about a client or a company during onboarding. But in reality, it’s much more complicated. Customers are living organisms, and what might seem fine during initial checks can change as questionable dealings could surface months later.
Here are a few hurdles organizations face:
How adverse media screening strengthens business practices
Addressing these challenges with a strong adverse media screening solution can help organizations spot risks early on, enabling them to proactively detect red flags before they become major problems, as well as facilitating continuous monitoring of clients to catch any emerging risks. Companies are also aided in their compliance efforts, with global regulators expecting firms to do more than just basic background checks. Going beyond compliance, adverse media screening helps companies protect their reputation by steering clear of risky business partners—even if regulations allow them to do business.
Adverse media screening should integrate seamlessly with KYC processes that unveil hidden risks byexposing associations with criminal activity or terrorist financing, allowing organizations to take necessary precautions. These processes should enhance due diligence by providing information that clients themselves don’t provide for KYC verification, ensuring a more comprehensive customer profile. And of course, they should also meet regulatory requirements by emphasizing the need for ongoing monitoring of customers.
Elevate KYC by building trust
A strong KYC program is no longer just about ticking boxes. By incorporating adverse media screening into AML and KYC frameworks, firms gain a powerful tool to proactively identify risks, enhance due diligence, and ultimately, safeguard institutions from financial crime. A robust KYC program with adverse media screening at its core is not just about AML compliance—it’s about building trust and protecting the integrity of the financial system.