Private Market Investments
Private Markets broadly describe assets not traded on public markets and globally was valued at $22t as of 2024. These markets offer certain investors access to investment opportunities beyond traditional exchanges. The capital deployed in private markets plays a vital role in financing innovation, infrastructure, and long-term economic growth and Private Assets have seen strong growth over the past twenty years. Between 2000 and 2023, total AUM across private market asset classes increased almost 20-fold, reflecting a CAGR of 13 percent driven by structural and investor-led factors alongside the ability to generate attractive, risk-adjusted returns.
Private Markets have long been associated with institutional investors due to high minimum investment levels, complex fund structures and significant lock-up periods. General Partners (GPs) would create a close-ended fund for these investors or Limited Partners (LPs) to invest in. The LPs would make a commitment to the fund but would not be fully invested day one. Instead, the GPs would call capital over a draw down period as it deploys the investment (up to the LP’s commitment). GPs are now however looking to broaden their investor base into the private wealth channel that has historically had very limited access to the drawdown funds largely due to the required investment ticket size, and the perceived complexity of the structures.
We have recently seen an evolution of investment structures in Private Markets in what has been dubbed the “retailisation” of Private Markets. These structures have discarded the complexities of the close-ended funds for fully funded investments that are evergreen and provide some liquidity to the investor. As of October 2025, 80% of firms managing over $100 billion deploy capital into evergreen funds which are making private market investments more accessible to a wider range of investors. These evergreen funds provide easier access for private wealth investment into private markets by enabling full capital deployment while providing periodic liquidity to exit. The growing popularity of private markets has driven the launch of these new evergreen structures across various domiciles.
- ELTIF – European Long-Term Investment Funds (ELTIFs) as the name suggests are European domiciled vehicles allowing sophisticated retail investors to access long-term private investments. Initially, these vehicles were closed-ended with no early redemption options however, the newest form, ELTIF 2.0 permits open-ended evergreen structures with lower ticket sizes and periodic liquidity, making them more accessible and flexible to private wealth.
- LTAF – Long-Term Asset Funds (LTAFs) are an FCA regulated open-ended semi-liquid fund designed to spur economic growth and investment into unlisted UK companies and infrastructure. 100% of investor capital is typically invested from day one by the fund, which also offers periodic redemption windows for limited liquidity.
- SICAV – A Société d’Investissement à Capital Variable (SICAV) is a Luxembourg domiciled open-ended investment company structure that can host multiple sub-funds, including private market strategies. Capital is usually fully invested at subscription, and liquidity is semi-liquid for private assets.
Investment Strategies
Private Market Investments typically focus on four main investment strategies across the maturity spectrum.
1
PRIVATE EQUITY
PRIVATE EQUITY (PE)
2
PRIVATE CREDIT
PRIVATE CREDIT
3
INFRASTRUCTURE
INFRASTRUCTURE
2
REAL ESTATE
REAL ESTATE
Private Market Asset Classes
Private markets deploy capital into many asset classes but most regulated funds typically allocate capital towards Private Equity, Private Credit, Infrastructure and Real Estate. Each asset class has its strengths and drawbacks, yet they share a common advantage: the ability to deliver a new source of return while enhancing portfolio diversification.
Private Equity (PE)
Private Equity (PE) strategies are equity investments made into companies that are not publicly traded. As of 2025, the global value of private equity funds is ~$9.9 trillion. Private equity can be further divided into sub-strategies dependent on the stage in the life cycle of the company.
- Venture Capital – Funding to early stage-startups who typically have unproven models that may not generate revenue or profits. Carries higher risk but has the potential for substantial returns.
- Growth Equity – Investments in companies that are more mature than a startup, but less established and faster growing than a typical buyout. Funding is provided in exchange for an ownership stake, carrying a lower risk than VC, with a focus on achieving steady growth rather than rapid scaling.
- Buyout – Acquiring a controlling stake or full ownership of a company. Usually targets more mature businesses, including those which may be underperforming or undervalued with the aim of improving operations, increasing efficiency and enhancing profitability. This strategy focuses on generating cash flow and strong returns over a longer investment horizon.
a. Management Buyout – Existing management team purchases the company.
b. Leveraged Buyout – Significant portion of acquisition financed through debt.
Private Credit
Private Credit refers to lending outside of traditional public credit markets and has experienced rapid growth, . Managers may choose to originate or acquire loans in one or more of the listed strategies:
- Direct Lending: A core strategy in Private Credit which involves senior secured loans made directly to middle-market companies (most frequently). Usually this slightly more yield than they previously had access to with a low risk profile.
- Hybrid/Structured Credit: This category includes strategies that combine debt with equity features or are secured by specific assets such as mezzanine financing, asset-based finance and asset-backed finance.
- Opportunistic/Distressed Strategies: Focuses on higher-risk, event-driven credit opportunities such as capital solutions for companies during market dislocations or loans to companies in financial distress. This is a higher-risk strategy aiming for outsized returns.
Infrastructure
Private infrastructure refers to the physical assets that provide essential services required for economies and societies to function. This asset class offers resilient and stable inflation-linked cash flows with minimum sensitivity to economic cycles, while exhibiting a low correlation to other asset classes. Private infrastructure assets under management has grown from $500 billion in 2016 to $1.5 trillion in 2024.
- Core Infrastructure – These strategies target investment in existing brownfield assets requiring minimal capital expenditure, low operational complexity and contracted revenues.
- Core+ Infrastructure – Focuses on slightly higher-risk assets than core, which are more exposed to market forces and revenues vulnerable to economic cycles.
- Value-add Infrastructure – Strategies targeting more complex assets with some form of development risk.
- Opportunistic Infrastructure – Targets greenfield projects or assets that will require substantial capital expenditure. Investors can generate a mix of both income and capital gains, dependent on the specific strategy.
Real Estate
Private Real Estate – These strategies involve acquiring real estate and related assets with a strong emphasis on value-add and opportunistic segments where active management can drive significant value creation. Key benefits include the potential for inflation protection, steady income and potentially lower correlation to traditional assets. As of 2025, global non-listed real estate AUM stood at $4.15 trillion.
- Core Real Estate – Targets high quality, full leased and established assets with low leverage and a low risk/return profile.
- Core+ – Slightly higher risk than core, focusing on well-occupied properties where modest improvements can enhance cash flow.
- Value-add Real Estate – Invests in assets with lease or refurbishment risk, requiring moderate capital expenditure to boost income and overall value.
- Opportunistic Real Estate – Concentrates on development projects or properties needing significant repositioning, offering higher return potential but with greater risk.
- Credit – Involves originating or acquiring loans secured by real estate, providing capital in the form of debt.
Evolution of Secondaries
Whilst many private market strategies target direct share purchases of private companies or primary credit origination, secondaries represent access to liquidity and refer to the sale of existing investor commitments in a fund or portfolio of direct investments. This segment has grown from $26bn in 2013 to over $160bn in 2024 and has largely been driven by the increasing demand for liquidity from LPs. Whilst predominantly still an institutional market place, retail is starting to participate in secondaries and this segment is expected to grow. Rather than committing capital to a new fund, secondary buyers acquire interests in existing funds that are already partially or fully invested, often acquiring these at a discount to NAV. The two main secondary transaction types are LP-led and GP-led. LP-led transactions focus on acquiring LP interests from investors in existing funds, with the intention of holding these positions until maturity, whereas GP-led transactions involve managers providing modest liquidity to their investors while retaining some of their best performing assets beyond the fund’s natural life through continuation vehicles. Most secondaries investment is centered around private equity but the market is starting to see secondary investments in private credit, infrastructure and to a smaller extent real estate.