Enhancing Portfolio Diversity

What’s Driving Asset Manager and Owner Demand for Private Markets?

With allocations set to rise over the next three to five years, we take a look at why asset managers and owners are embracing private markets.

February 2022

There has been a growing sense among asset managers and owners that public market assets are not always enough in their traditional roles as diversifiers, drivers of growth and income generators*.

The low-interest rate environment in place since the Global Financial Crisis has changed investors’ relationships with public markets and the COVID-19 pandemic has only added uncertainty and contributed to higher volatility.

These conditions have driven considerable institutional investor interest in private markets in recent years, and many have sought new asset classes to enhance their portfolios vacated by overvalued public assets.

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*State Street Private Markets Study 2021