Asset managers are facing growing demand from institutional investors to develop sophisticated private market strategies that balance high long-term risk-adjusted target returns, added diversification benefits, and fundamental value creation.
Private markets poised to benefit from new strategic landscape
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Private markets are enjoying growing favour by pension plans for their potential long-term returns and diversification benefits, with a significant rise in strategic allocation expected over the next three years.
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The United States leads in private market investments thanks to its robust ecosystem, followed by Europe for sustainable projects, and then Asia Pacific. Private debt is the most attractive asset class, followed by private equity, infrastructure, and real estate, with venture capital the least sought after.
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Despite challenges including geopolitical risks and a rapidly changing macro landscape, private markets are seen as offering compelling opportunities, with a holistic approach needed to balance financial returns and societal impact.
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