Carey Suen | Private Markets Wealth Advisory

In 2022, the Federal Reserve raised interest rates eleven times. By mid-2023, the federal funds rate sat above 5 per cent for the first time in sixteen years. For most retail investors, that looked like good news – savings accounts were finally paying something. For the HNW investors paying close attention, it was a signal to restructure.

The question was not whether rates would stay elevated forever. It was what the rate cycle had exposed about the portfolios built in the decade before it.

What a decade of low rates actually did

Between 2009 and 2021, the standard income-generation playbook – government bonds, dividend equities, buy-to-let property – delivered returns that looked reasonable on paper but concealed a structural problem. Investors were being compensated for duration risk and liquidity risk in ways that were not always obvious. When rates moved, those positions repriced sharply. Long-duration bond portfolios fell. Highly leveraged property positions tightened. Income streams that had felt reliable turned out to be more correlated to the broader market than their holders had assumed.

The investors who came through that period best were not necessarily the most aggressive. They were the ones whose income was not contingent on what central banks decided to do next.

The private markets allocation that institutions made years ago

Pension funds and sovereign wealth vehicles have been deploying capital into structured private market income for decades. The mechanics are not complicated: capital is placed into asset-backed positions – property receivables, infrastructure lending, senior-secured private credit – with defined distribution schedules and contractual return profiles. The income does not depend on equity market performance. It does not reprice with interest rate sentiment. It arrives on schedule because the underlying agreement says it will.

What has shifted over the past several years is accessibility. Regulatory developments across Singapore, the UAE, and the broader Gulf have steadily lowered the entry threshold for qualified individual investors. Structures that once required institutional minimums – and institutional relationships to access them – are increasingly within reach of HNW individuals who know where to look.

For expat investors across Asia and the Middle East, the logic compounds. Without domestic pension floors or home-market property income to anchor a portfolio, building reliable income from invested capital is not a secondary consideration. For many, it is the primary one.

What distinguishes a credible structure from noise

The proliferation of “passive income” content online has made the term almost meaningless. It is worth being precise about what a structured private market income strategy actually requires – not as a checklist, but as a framework for evaluation.

The income must be contractual. Not projected, not modelled, not dependent on a fund manager’s quarterly decisions. The distribution schedule is agreed in advance and documented accordingly.

The capital must be backed by a tangible asset. Property, infrastructure, a senior-secured lending position – something with recoverable value if conditions deteriorate. An income strategy with no underlying asset is not an investment. It is a liability dressed as one.

The documentation must be transparent and legally enforceable. Sophisticated investors read agreements before they sign them. They understand the recourse provisions. They know exactly what happens if the counterparty fails to perform.

None of this is a high bar. It is simply the minimum standard that the institutional market has applied for years – and that individual investors are now, rightly, beginning to demand for themselves.

Predictability is not conservatism

There is a persistent assumption in retail investing that predictability and returns exist in inverse proportion – that accepting reliable income means accepting diminished upside. The institutional record does not support this.

Marc Rubinstein, writing in the Financial Times on the evolution of capital markets businesses, noted that the variation of quarterly trading revenues at JPMorgan had fallen by a third over five years – even as the revenue base grew. Markets businesses, historically avoided for their unpredictability, had become structurally more stable. The implication for income investors is the same: the binary between volatility and return is less fixed than it once appeared.

A structured income position that returns a defined yield on a defined schedule, compounded consistently over a ten-year horizon, will outperform a volatile high-upside position across most realistic scenarios. The mathematics are not controversial. The discipline required to act on them – to resist the next speculative cycle, the next projected return that sounds compelling – is where most investors come unstuck.

The shift is already underway

Global allocations to private market assets crossed $13 trillion in 2023, according to McKinsey. The growth has not come from retail speculation. It has come from institutional capital – pension funds, endowments, family offices – steadily increasing their exposure to asset classes that deliver income independently of what public markets do.

The individual investor who accesses this space now – with the right structure, the right documentation, and the right advisory relationship – is doing something that was functionally unavailable to them a decade ago. That is not a marketing claim. It is a structural change in how private capital markets operate.

The question is not whether structured private market income belongs in a HNW portfolio. The question is whether the investor asking it is prepared to engage with it on its own terms – with the rigour it requires, and without the shortcuts it does not offer.

Carey Suen provides private markets wealth advisory services to HNW expat investors across Singapore, Hong Kong, the UAE, and Saudi Arabia.