Wealth advisors are increasingly looking to private market investments to shield clients from volatile listed markets, according to the UK investment fund platform Cofunds, which says it has seen a significant uplift in advisor demand for this type of investment.

The independent platform says advisors are keen to make use of the stability of return they see private market investments offering because assets are valued in line with the fundamentals of a business and not driven by short term market sentiment.

The CF Arch cru fund range was launched in July 2006 and has currently over £410 million under management.  As an example of performance, the CF Arch cru Balanced Fund has made a slight gain over one year of 2.9 per cent, a period during which most stock indices have fallen by double-digit amounts.

“Such violent fluctuation, as recently experienced across public markets the world over, has prompted a clamour from advisers for viable, alternative diversification options,” said Cofunds director of fund manager relations Russell Lancaster. Among the funds on the Cofunds platform are the CF Arch cru range.

Private market investments have historically been widely used by institutional investors, family office and wealth managers to diversify sources of return but such investments are becoming increasingly accessable to retail investors.

However, investment in unlisted firms is currently facing difficulties. Permira, the large European private equity fund business, for example, has reportedly returned €1.5 billion in uncalled cash to investors. Rising borrowing costs have made some transactions harder to execute. However, some research organizations such as Preqin, the UK body that tracks private equity activity, says cheaper valuations could boost long-term returns.