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 Italy, 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, with a majority of respondents globally saying that at least half of private markets fundraising will come through such products in as little as two years’ time.

In Italy, this trend is less established, with most respondents predicting that traditional fundraising will continue to dominate for now. But this may change, with 30 percent predicting that at least half of fundraising will come through retail-style products in the next two years. Half of Italian institutions in the survey also say that product innovation in semi-liquid funds will be important for increasing private markets access for defined-contribution investors. However, governments and regulators may also need to relax liquidity requirements and enforce better data reporting standards on private enterprises to accelerate democratisation.

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. One example is that the majority of Italian institutions in the survey are increasing their allocations to private credit as a strategy to enhance diversification.

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). Respondents in Italy are even more enthusiastic about developed Europe over the next two years, with 93 percent of respondents citing it as a key market for investment opportunities.

AI adoption in private markets: The AI revolution is already underway. A significant majority (75 percent) of respondents in Italy 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 three trends outlined above.