Private markets
Fundamentals
A clear-eyed introduction to the asset class driving long-term value for sophisticated investors, what it is, why it matters, and how to think about it in your portfolio.
GLOBAL AUM
13T+
Capital managed in traditional closed-end private market funds globally.
FORECASTED GROWTH
32t
Projected private markets AUM by 2030, up from $11T pre-pandemic.
Source: Preqin Private Markets in 2030
LONG-TERM OUTPERFORMANCE
5%
25-year annualized net premium of private equity over the MSCI World Index.
ALLOCATION
21.9%
Average institutional investor allocation to private markets.
WHAT THEY ARE
The role of
private markets
in a portfolio
Private markets encompass investment opportunities that exist outside of publicly traded exchanges, including areas such as private equity, private lending, and tangible assets like real estate and infrastructure. Investors typically access these opportunities by partnering with specialized managers who have the experience and insight to identify, acquire, and operate assets within these markets. Investment outcomes are often driven by long-term value creation, recurring income, and eventual liquidity events.
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As part of a diversified portfolio, private market investments can help broaden exposure beyond public securities, potentially increase overall returns, and introduce stable income components that are less correlated with traditional markets.
WHY IT MATTERS
Unlocking value
Three structural advantages explain why institutional investors have steadily grown their allocations to private markets, and why thoughtful individuals are following suit.​
01
Access to exclusive opportunities
Private markets provide entry into investments not available on public exchanges, including off market deals, specialized sectors, and situations with less competition.
02
Active value creation
Investments are managed with a hands-on approach, allowing operators to drive performance improvements, operational efficiencies, and strategic growth directly.
03
Long-term investment horizon
Private assets are typically held over extended periods, enabling investors to capitalize on compounding value and reduce exposure to short-term market volatility.
SIDE BY SIDE
Private vs. Public
The two markets serve different purposes. Understanding how they differ across liquidity, horizon, and return drivers is essential to building a balanced portfolio.
Private Markets
Public Markets
ACCESS
Limited to qualified investors, often via specialized managers.
Open to all investors via exchanges and funds.
RETURN DRIVERS
Operational improvements, active management, illiquidity premium.
Market beta, earnings cycles, sentiment.
HORIZON
Long term; typically 3–10+ year investment periods.
Short to medium term; performance measured quarterly.
LIQUIDITY
Limited; capital is committed for defined holding periods.
Daily trading; immediate entry and exit.
TRANSPARENCY
Periodic reporting; relationship-driven communication.
Continuous public disclosure and price discovery.
BEFORE YOU INVEST
Advantages & Considerations
Private markets offer distinct opportunities, but they also require a different mindset. Here's a candid view of both sides.
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Key Advantages
Access to opportunities outside public markets, including off-market and specialized investments.
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Greater flexibility in deal structuring to align with specific investment objectives.
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Exposure to a broader and growing universe of private companies and real assets.
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Important Considerations
Investments are typically less liquid and require longer holding periods.
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Access often requires partnering with experienced managers or sponsors.
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Risk profiles may vary, with the potential for higher returns alongside increased complexity.
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