Middle Eastern institutions enter a new phase of private markets growth

Private markets have become a cornerstone of long-term investment strategies globally, but Middle Eastern institutions have demonstrated a particularly strong appetite for the asset class for decades.
 

Driven largely by regional sovereign wealth funds, whose average allocations exceed those of their global peers, institutions across the region have viewed private markets as a core component of their investment strategies. New findings from our 2026 Private Markets Study point to a new phase of growth, shaped by rising allocations to private markets and expansion beyond their traditional institutional base, with individual investors playing a much larger role in private markets participation.

Now in its fifth year, the survey gathered perspectives from nearly 500 C-suite and senior private markets executives at asset managers, wealth managers, and asset owners around the world, including in Kingdom of Saudi Arabia (KSA), the United Arab Emirates (UAE), Oman, Qatar, and Kuwait.

The findings reveal more than strong demand for private markets across the region. Middle Eastern institutions are taking a more strategic approach to growth, looking beyond allocation decisions to focus on the governance, operating models, and capabilities required to support sustainable long-term growth in private markets.

More than half of Middle Eastern respondents (57 percent) expect to increase allocations to private equity, private credit, real estate, or infrastructure over the next one to two years, compared with 47 percent globally. Their plans are driven primarily by expectations that private markets will deliver higher returns (84 percent) and lower volatility (58 percent).

The findings also point to a strong focus on the operational implications of this growth. As institutions expand their exposure and serve a broader investor base, they are assessing how their infrastructure, technology, and servicing models must evolve to manage greater product complexity, liquidity requirements, regulatory obligations, and reporting demands. This emphasis on operational readiness will be critical to scaling private markets efficiently and sustainably.

In line with the global democratisation of private markets and the expansion of the wealth management industry across the Gulf Cooperation Council (GCC), particularly in KSA and the UAE, 87 percent of regional respondents viewed growing individual access to private markets as an opportunity rather than a challenge, compared with 70 percent globally.
 

The retailisation opportunity

Local institutions believe that individual investors across the retail and wealth segments will be major drivers of future growth in private markets, with more than a third of respondents (37 percent) expecting products aimed at this market to account for at least half of all private markets capital raised.

Among the strategies and underlying asset classes supporting broader access and adoption, private credit remains a key pillar, particularly in the Middle East. Its breadth, spanning direct lending, asset-backed finance, and structured solutions, offers the flexibility required for inclusion across a range of products designed for individual investors. Nearly half of regional respondents (47 percent) identified private credit as the leading asset class for opportunities to offer products to individuals or manage assets on their behalf, compared with 39 percent globally.

European semi-liquid fund structures, such as the European Long-Term Investment Fund and the UK Long-Term Asset Fund, which are leading vehicles for individual access to private markets in Europe, are the preferred structures among Middle Eastern asset and wealth managers. Respondents viewed these vehicles as easier to integrate into existing distribution channels than other fund types. This preference could create significant opportunities for investment managers already offering such products in Europe to extend their distribution into the region through local platforms and wealth channels, while adapting their offerings to local market preferences.

However, democratised access extends beyond direct investment by individuals. The research suggests that institutional investors will also play an important role as intermediaries. Products and funds originally designed for individual investors are increasingly being incorporated into the portfolios of asset owners, including defined benefit pension funds and insurance companies. All pension funds surveyed, representing nearly half of respondents, either already make use of these products or plan to do so in the near future.

Integrating evergreen and semi-liquid structures into the portfolios of sophisticated institutional investors can optimise private markets programmes in two principal ways:

• Increasing deployment: Nearly two-thirds of respondents (62 percent) said that additional avenues for accessing private markets enabled them to allocate a larger proportion of their portfolios to the asset class, supporting the region’s private markets growth ambitions.
• Accelerating deployment: These structures allow investors to put more capital to work from the outset, rather than waiting for the underlying closed-end funds to call committed capital, an advantage cited by 71 percent of asset owner respondents. This use case is also evident in the new private markets and alternatives ETFs launched by State Street Investment Management over the past 18 months, which treasury teams at large, sophisticated institutional investors are increasingly adopting, alongside other solutions, as proxies for private markets exposure and tools for managing interim liquidity.

The growth of new semi-liquid vehicles and investor types also creates operating-model challenges. Middle Eastern respondents were broadly in line with global averages, citing regulatory compliance (80 percent) and liquidity management (77 percent) as their main operational challenges.
Within these areas, many of the leading challenges related to the growth of individual investors. A third of respondents (33 percent) said scaling ongoing anti-money laundering (AML)/know your customer (KYC) processes to accommodate larger volumes of smaller clients was their biggest compliance challenge, while nearly a quarter (24 percent) cited assessing the suitability of a growing number of smaller investors during onboarding.

For liquidity management, the biggest challenge, cited by 30 percent of respondents, was redemption and tender management as semi-liquid funds attract more investors. However, all respondents also said they had clear strategies involving a combination of investment in key partnerships, in-house technology, and workforce expertise to meet these challenges.

As private markets continue to expand in scale and complexity, institutions must manage growing volumes of unstructured information, from investment documentation and fund communications to portfolio company data. Fragmented datasets can limit transparency and reduce operational efficiency, making informed decision-making more difficult.

Generative artificial intelligence (AI) and large language models (LLMs) can help institutions make better use of this information. Our latest Private Markets Study found that 83 percent of institutional investors recognise the potential for AI and LLMs to transform unstructured information into actionable insights. We are helping clients address this challenge by combining data management with AI-enabled analytics and integrated private markets solutions. These capabilities can convert fragmented data into timely, decision-ready intelligence.

The opportunity is particularly relevant in the Middle East. In our 2025 Private Markets Study, 37 percent of respondents in the Middle East said they were either using generative AI and LLMs to generate consistent, analysable data from unstructured information related to their private markets investments or investing in specific use cases to do so. A further 50 percent said they planned to do so but did not have firm plans. Middle Eastern institutions are positioning themselves at the forefront of private markets growth, with strong conviction in expanding private asset allocations and embracing broader investor access. However, capitalising on the full opportunity will require more than expanding portfolios and product ranges. Institutions that proactively embrace democratisation while modernising their capabilities across liquidity management, compliance, data, and servicing will be best positioned to turn the region’s momentum into sustainable growth.