Product innovation and new technologies are accelerating the democratization of private markets, according to State Street’s new report, 2025 Private Markets Outlook: Driving success in volatile environments. The report reveals the biggest trends affecting institutional investors in France, drawing on our latest global survey of 480 investment firms.

We focus on three crucial themes, each of which has implications for the future of private equity, private credit, real estate and infrastructure.

The democratization of private markets: The survey highlights a shift toward retail-like products in private markets. Fifty-five percent of institutions in France say that at least half of private markets fundraising will come through such products in as little as two years’ time.

Several developments could help unlock growth in retail-style products. Product innovation is key, with over half (55 percent) of French respondents saying that the evolution of semi-liquid retail products will be an important factor in opening up private markets to defined-contribution investors. Meanwhile, governments and regulators may need to relax liquidity requirements and enforce better data reporting standards on private enterprises.

A focus on quality: The shift from quantity to quality is now entrenched in investment strategies. Private markets investments are seen as a way to manage risk, for example, with over half of French institutions increasing their private equity allocations because of concerns about poor returns in public markets.

The emphasis on quality can also be seen in a shift in capital allocation plans from emerging to developed markets. Developed Europe saw a significant jump in interest since last year’s survey, with 63 percent of limited partners (LPs) now planning investments in this region within the next two years (up from 43 percent in 2024). French institutions are even more enthusiastic about developed Europe, with 77 percent of its LP respondents citing the region as a top focus for investment over the next two years.

AI adoption in private markets: The AI revolution is already underway. A significant majority (80 percent) of French respondents recognise the opportunity to use GenAI-based large language models to make better use of their unstructured information.

The report goes on to explore why private markets are proving to be resilient at a time of increased market volatility and geopolitical uncertainty, as well as which private asset classes are most likely to benefit from the three trends outlined above.