Private Equity Ascendant: RIAs Shift Focus from Hedge Funds, SEC Insights Show

By Paul Padovani

A recent analysis of SEC data spotlighting significant reallocation of funds, Registered Investment Advisors (RIAs) are shifting their preference to private equity over hedge funds.

The analysis, which examined Form ADV filings from RIAs that offer financial planning and advise on private funds, paints a compelling picture of the changing investment preferences over the last nine years. Notably, RIAs have significantly increased their allocation to private equity, nearly doubling it.

Private funds, comprised of various asset classes, including hedge funds, private equity, and venture capital, are particularly notable for their higher investment entry points. Over the nine years from 2015 to 2023, private funds overseen by RIAs surged by over 50%, a growth rate outpacing the increase in the number of RIAs themselves. The total asset value of these funds swelled from $147 billion to a staggering $263 billion.