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The full panel discussion on the topic of ‘Consequences for Investors’ can be viewed on Amundi’s YouTube channel.
Transcript
Moderator Charlotte Kan:
Benoit, I’d like to bring you in here for the private markets perspective. What role can private markets play in helping pension systems deliver better individual outcomes while supporting broader economic investment?
Benoit Durteste:
Well, I think to answer that question, it’s useful to look at what’s happened in other parts of the world, and specifically across the Americas, where we’ve seen that pensions have steadily increased their allocations to alternatives, to private assets — which today represent typically north of 20%, in some instances up to 50% of their portfolios.
So, what’s the attraction of private assets for these pension systems? I can name a few.
One: they’re a very good diversification engine. Private assets give you access to a much broader part of the economy, particularly in areas that are less well represented by public markets.
Second: there’s strong structural alignment. If you think about pension capital, by design it’s long duration. And the key factor of performance for private assets is time — it’s the ability to generate an illiquidity premium. This structural alignment translates into better outcomes for investors and for savers, as well as more productive long-term investment for the real economy.
And third: private assets are versatile. They’re not a single, homogeneous asset class. Various strategies offer very different combinations of risk, return, growth, income profile, and liquidity — such that they can be appropriate for many objectives of pensions.
So you have diversification, structural alignment, and versatility.
Of course, at the end of the day, it boils down to performance. Investors don’t experience asset classes — they experience performance and returns — and private market investments have a track record of delivering attractive long-term returns.
Charlotte Kan:
Benoit, very quickly — could you expand on the partnership between ICG and Amundi, and how such partnerships can help bridge the gap in scaling private market access?
Benoit Durteste:
Yes. That’s a good question.
There are a number of challenges that [our industry needs] to overcome, and I don’t think our industry — the alternative asset management industry — has done a very good job at that so far, which is why the partnership between Amundi and ICG is so exciting.
Very briefly, some of the challenges:
The first, and main one, is that private assets are fundamentally illiquid. That’s a feature — as I’ve mentioned — it’s part of performance generation. But of course, it creates complexity, particularly when you’re dealing with investors who are accustomed to liquid solutions.
The second main challenge is scalability. These strategies do not scale easily — at least not when you want to preserve performance.
They’re not flow products. You require very significant origination, local investment teams, and active portfolio management.
And then that’s before we even get into structuring, regulation, and so forth.
What’s quite exciting is that the partnership between ICG and Amundi is uniquely positioned. We bring together very complementary capabilities and expertise to try to address those challenges.
For me, a key objective is to help shape the alternative asset management industry when it comes to accessing wealth and retail investors.
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