2024 Private Markets Outlook: From headwinds to tailwinds

2024 private markets outlook: Building strategies for scale and success

Drawing from our survey of 480 institutional investors, our 2024 Private Markets Outlook delves into investor sentiment, deals and fundraising trends, and the latest developments in data and technology in the private markets space.

March 2024

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Despite facing high borrowing costs and global economic disruption over the past decade, the growth trend in private markets continues, fueled by increasing investor demand. The next few years will be pivotal for asset managers and owners navigating the complexities of investing in private markets. Efficient selection and access to these asset classes will be paramount in enduring unpredictable market conditions.

The first installment in the series, “From headwinds to tailwinds“ is now live. Here are the highlights of our report:

Demand for exposure to private markets investments continues to grow despite macroeconomic headwinds

71 percent of respondents said they will increase their allocation to infrastructure and private debt. Most institutions expect to boost their exposures to all private markets sub-asset classes except real estate over the next one-to-two years, and all sub classes over the next three-to-five years. What factors are driving this increased interest in private markets investments?

Expected allocation changes to private market asset classes chart 1

New strategies are needed to navigate macro challenges

Despite investors seeing macro challenges abating, their impact is expected to continue in the near term. However, investors now have clearer strategies for improved private markets operations and investments to meet these challenges and achieve risk aversion. Diversification, investment in risk management and reducing risk exposure are institutions’ primary responses to the market environment.

Expected allocation changes to private market asset classes chart 6

Outsourcing and technology are top priorities

As institutions aim to reduce risk and achieve operational excellence, they look for data accuracy, timeliness and interoperability. However, unstructured, inaccurate and fragmented data makes it difficult for institutions to navigate their private markets operations efficiently. Institutional investors are thus considering outsourcing data management and tapping into technologies such as artificial intelligence (65 percent) to help strengthen their operations.

Legislation may help drive retail flows

67 percent of investors believe that legislation such as the European Union’s Long-Term Investment Fund (ELTIF) and UK Long Term Asset Funds (LTAF) will be at least somewhat successful in driving retail investment in private markets. Almost half of the respondents think that retail investors looking for returns and diversification will seek exposure to private markets investments.

Expected allocation changes to private market asset classes chart 4

Based on our study, we have curated a series of three reports that will explore investor sentiments, current market trends and opportunities in the private markets industry.

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