Wealthy clients increasingly seek private market funds to diversify from traditional assets: OCBC

SINGAPORE - OCBC Bank’s high-net-worth clients are increasingly investing in private market funds amid a rising demand for alternative investments.

To capture the momentum, the bank is expanding the suite of private market funds and exploring offering other types of alternative investments such as tokenised assets.

Accredited investors in the retail banking space – those who have net personal assets exceeding $2 million, among other criteria – are tapping alternative investments, such as private market funds, as they seek to gain investment access to assets other than the conventional categories of stocks, bonds and cash.

Alternative investments are used to diversify a portfolio and can potentially offer protection against market downturns.

Speaking to The Straits Times, OCBC head of group wealth management Tan Siew Lee said: “Accredited investors are gaining exposure into alternatives that are traditionally less correlated with the traditional asset classes.”

Assets under management (AUM) of private market funds tripled from August 2024 to August 2025.

Currently, only accredited investors with an aggressive risk profile can access private market funds, because of the sophistication and risk levels associated with them.

Private market funds are not as liquid as the traditional unit trust. “If you need money, it’s quite difficult to sell,” she said.

The bank is looking to expand the types of private market funds being offered, from private equity to private real estate and private infrastructure.

OCBC is also exploring launching tokenised assets to accredited investors in the retail banking space, having offered such products to corporate accredited investors. Tokenised assets can bring liquidity to traditionally illiquid markets such as private equity and real estate, while also enabling fractional ownership, making these assets more accessible to investors.

“We do have the capabilities and we are doing an assessment to see which asset to tokenise. We want to make it bite-sized so that we can sell it to investors out there,” Ms Tan said.

There has also been increased interest in precious metals, which are typically seen as safe haven assets and diversifiers from traditional asset classes.

The AUM of gold and silver quadrupled between August 2024 and August 2025.

The number of customers who bought gold on the OCBC app from January to July rose 2.5 times from a year ago. Those who invested in silver in the same period rose 1.5 times from a year ago across all age segments, including those under 30 years old.

This comes as declining interest rates on savings accounts have pushed investors – including those who bank with OCBC – to look for more avenues to grow their money.

Noting that OCBC is among local banks that have cut rates, Ms Tan said customers are looking into investments that will give them higher returns.

But investors with varying risk appetites – whether conservative or aggressive – will gravitate towards different types of assets, she said, noting that investors with a conservative risk profile tend to favour money market funds (MMFs).

Singapore’s second-largest bank by assets saw investments in MMFs tripling from January to July 2025, as compared with the same period a year ago. MMFs invest in short-term instruments like Treasury bills, commercial paper and certificates of deposit. Investors can liquidate holdings and withdraw their money whenever they need to.

Meanwhile, aggressive investors are more inclined towards higher-risk products such as equity-linked convertible investments or structured investments, she said. Equity-linked convertible investments are a type of structured investment that combines features of debt and equity.

OCBC recorded a 43 per cent increase in equity-linked convertible investments and structured investments in the January-July period compared with a year earlier.

Interest rates have been falling for savings accounts here, the latest being UOB cutting rates for its flagship UOB One account from Sept 1 – the third such reduction in the past two years. UOB’s move follows on the heels of OCBC, which dropped rates on its 360 account from Aug 1 – the second time in 2025.

For different age groups, investment preferences also vary.

An OCBC study on the financial wellness of Singaporeans in 2024 revealed that among people who invested in exchange-traded funds, the number of those in their 20s was about four percentage points higher than those in their 30s and seven percentage points higher than those in their 40s.

When it came to fixed income investments such as bonds and Treasury bills as well as unit trusts, the percentage of Singaporeans in their 20s who invested in these instruments was lower than other age groups.

Meanwhile, between January to July, investors aged 30 to 39 grew their precious metals investments the most year on year, as compared with the same period a year ago, OCBC data showed.

Those in their 50s to 60s may also choose to maintain a more balanced portfolio, taking into account their investment time horizon and the remaining income-earning years in their careers.

The bank wants to help clients better check if they have enough for retirement.

Ms Tan is helming OCBC’s plans to launch a retirement planning tool in 2026 that can help identify retirement gaps.

This involves analysing a customer’s full portfolio including critical illness plans, mortgage and housing to identify retirement gaps of customers, beyond consolidated financial data.

She said that many clients struggle to get a clear picture of whether their current cash flows and insurance plans will be enough to cover their retirement needs.