Wealth customers turn to private markets for higher returns

US tech firms are helping drive interest, said digital wealth firm StashAway.

Demand for diversification is reshaping the way retail investors approach wealth management, with growing interest in private markets once reserved for large institutions.

A number of private funds are expanding their services to attract individual retail investors, said Stephanie Leung, chief investment officer at StashAway Hong Kong Ltd.

“In the past few years, we’ve seen a push-and-pull factor coming together,” she told Asian Banking & Finance. “The pull factor is that investors demand higher returns. The push factor is that a lot of these private funds are expanding their business to offer smaller ticket sizes to smaller investors.”

Private markets—covering private equity, venture capital, and other unlisted assets—have historically delivered higher returns than publicly traded stocks and bonds.

Yet access has long been restricted. Minimum investment requirements often ran into millions of dollars, keeping the space dominated by pensions, endowments, and insurance companies.

That exclusivity is eroding as financial technology platforms bring private market strategies to smaller investors. “We actually built private market offerings because our customers asked for it,” Leung said in a video call via StreamYard.

The shift reflects a broader reallocation of wealth. For decades, Hong Kong’s property market was a powerful generator of returns, serving as the foundation of many families’ wealth creation. But the sector has been sluggish since 2021, weighed by pandemic restrictions, economic headwinds in China, and rising interest rates.

“Looking forward, the returns that you get from the housing market may be more diminished compared with the returns that we’ve been enjoying in the past 20–30 years,” Leung noted.

Even though analysts see signs of recovery—S&P projects residential property sales to reach 20,000 in 2025, the highest since 2019—many investors have begun looking elsewhere. Global opportunities, particularly in the US technology sector, are drawing attention.

“In the past few years, we’ve seen a rise of technology companies in the US, the rise of artificial intelligence (AI),” Leung said. “These are presenting a lot of opportunities not found here.”

She cited OpenAI’s $500b valuation, making it the world’s most valuable private company, alongside SpaceX at a similar range. “All these giants in terms of market caps are staying private for longer.”

The trend has benefitted digital wealth platforms like StashAway, which provide streamlined access to private funds with reduced minimums. Traditionally, high-entry thresholds and lock-up periods excluded younger professionals.

“If you look at this segment, a lot of them have quite a bit of liquid wealth to invest,” Leung said. “However, the options are actually quite limited and oftentimes, there’s a lot of strings attached, for example, very high minimums and lock-ups.”

StashAway positions itself as a digital wealth advisor “with a human touch,” offering private equity access for as little as $20,000—far below institutional levels. The company also assigns dedicated bond advisers to clients reaching higher investment tiers, tailoring advice to individual life goals.

“That provides an easy way for these young professionals or affluent investors to diversify their portfolios through both public and private channels,” she said.

StashAway’s core demographic—professionals aged 30 to 45—expect flexibility and digital convenience. Many are used to managing finances on their smartphones rather than through traditional bank advisers.

“[For example], today, I have an investment idea. I want to reallocate my portfolio. I want to get it done right away. I don’t want to pick up my phone and talk to a wealth advisor who may or may not be there and put me on hold,” Leung said.

With 24/7 app access, investors can view and adjust their portfolios instantly. “Most of our customers, particularly the ones who are much more tech savvy, are already very used to doing their own wealth management on the app, on the phone, or anywhere they are. I think that is a trend that’s not going away,” she added.