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Interest in investment is increasing rapidly, with tech being seen as a major reason behind the shift.
Data from the Australian Investment Council revealed that as of June 2023, assets under management reached $139 billion, a 33 per cent increase in just 18 months.
Speaking to Broker Daily, InvestmentMarkets chief marketing officer Darren Connolly said the ease of access is boosting investment in private credit, mortgage funds, and private equity.
It’s also paved way for ‘new’ forms of investing, such as crowdfunding and fractional ownership.
With no more than a smartphone, people are now able to access investment opportunities that were once “dominated by institutions.”
“Investors today can invest anywhere around the globe, aggregate accounts, track financial goals, access in-depth market research, and interrogate real-time reporting, all while sitting on their couch at home. We believe this shift is making investors more independent. They want to be in control of their financial journeys,” said Connolly.
“Technology has also opened access to a far wider range of investment opportunities, from traditional asset classes to alternative investments like private equity and mortgage funds.”
The rise of AI is helping make these opportunities even easier. Investors are taking advantage of AI-driven analytics to make decisions.
Connolly said that if they need a platform to simplify their strategy, “[T]hey can find one. They can do anything.”
With the rise of fractional ownership, some are pooling in to purchase high-value items, including real estate.
With the affordability of property making goals unattainable for certain borrowers, the new forms of investment can be an attractive option.
There are platforms that Australians use to access fractional ownership for property, such as BrickX, DomaCom, and CoVESTA.
While this can be a great way for people to enter the property market on a budget, there are challenges.
Legal issues can arise as co-owners need to work co-operatively. There are also tax obligations that must be upheld by all parties.
Selling the property could also pose an issue as if an agreement is not met, it could go to court.
Still, the rise of technology is creating more accessibility and in turn, more options for investors.
“There’s been a noteworthy shift toward alternative investments in recent years as investors seek high-performing avenues to diversify their portfolios beyond traditional assets. Private equity and private credit have emerged as prominent options, providing investors with opportunities for potentially higher returns through investments in private companies and their lending activities,” said Connolly.
“The rise of new fractional ownership models is also enabling more investors to access previously exclusive asset classes, such as real estate and fine art, thus democratising the alternatives world. Investors are more discerning than ever, seeking detailed insights into performance metrics, fee structures, and risk factors associated with alternative assets. This push for transparency has prompted many alternative investment firms to adopt advanced technologies that provide real-time data and reporting, thereby fostering greater client trust and engagement.”
