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 the UK, 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 majority of UK respondents (55 percent) believe at least half of private markets fundraising will come through semi-liquid retail-style vehicles in as little as two years’ time.

Several developments can help to unlock growth in the semi-liquid fund space. Product innovation is key, according to more than one-third of UK institutions. Examples include ETFs like State Street Global Advisors’ PRIV,¹ a private credit ETF that provides retail investors with improved access to private assets. There is also a need for technology-driven improvements in data access and management.

A focus on quality: The shift from quantity to quality is now entrenched in investment strategies, with respondents focused on due diligence and risk assessment, as well as management at the asset, portfolio and manager levels.

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). The shift in sentiment suggests that the UK’s attractiveness for private markets investments could be on the rise.

AI adoption in private markets: The AI revolution is already underway. A significant majority (85 percent) of UK respondents recognise the opportunity to use GenAI-based large language models to generate analysable data and insights from 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 further evolution of private markets.