We look at some of the predictions that wealth managers around the world are making about assets, particularly in the private markets sector, which have been hot topics in recent years.

The past year will be remembered for many things in the “alternatives” space when words such as “secondaries” and “evergreen” became popular, reflecting that a desire for liquidity and easier access were important talking points.

After what had been a tough time for the private markets sector in general, particularly among private equity buyout and venture capital players as a result of Covid and rate hikes, it looks as if these sectors have recovered – to an extent. 

According to Preqin, the research group now owned by funds titan BlackRock, global private equity fundraising reached $507 billion in the nine months to end-September 2025, accounting for about 73 per cent of the total for the whole of 2024. Secondaries funds – which hold pre-existing private investments – made up 15 per cent of all the funds raised in this area, and were way above long-term averages. Switching to private credit, funds that focused on Europe made up 46 per cent of fundraising – rising from 23 per cent in 2024. With infrastructure, large funds dominated, and fundraising recovered in the property space.

Since the early noughties, performance for private markets in general has been robust - beating listed stocks, but maybe that task is getting harder. In an article by Wellington Management in July last year (authors William Craig and Mark Watson), it observed that over the last 25 years, the Cambridge Associates US Private Equity Index had a pooled net return of 12.09 per cent, compared with annualised returns of 8.46 per cent and 9.38 per cent for the Russell 2000 and the S&P 500 indices, respectively.    

Wealth managers appear to be broadly upbeat about private equity and certain other parts of the private markets space. And in the hedge funds sector, as reported here, returns have had their best result since 2009, and it will be a challenge to stage an encore.

“Private equity remains resilient despite a challenging investment environment. While its performance since the 2021 peak has trailed public markets, long-term returns continue to be supported by earnings growth rather than multiple expansion,” LGT Capital Partners said in its Investment Outlook 2026 report.

“Deal activity shows signs of recovery, particularly in small- and mid-market transactions, while extended holding periods and lower distribution yields continue to influence investor behaviour. In addition, secondary markets and alternative liquidity solutions are playing an increasingly important role as the industry adapts to evolving conditions,” it said. 

George Padula, principal and chief investment officer at Modera Wealth Management, a Massachusetts firm, was asked if he thought client inflow into private markets had slowed, given delays to exits and indigestion pains. 

“There is a recognition that private investments are not replacing public investments but rather can complement them depending on the client’s circumstances, goals, and fact patterns,” he said. “Given that the cost structure and types of private investment are shifting, it seems that the 'democratisation’ of private investments is continuing. New fund structures (interval funds and evergreen funds, as examples) with lower minimums are gradually lowering barriers to entry.

“There is caution though. Just because someone qualifies for a private investment doesn’t mean that they should invest. Likewise, not every private investment is created equally,” Padula said.

Monish Verma, founding CEO, partner, Vardhan Wealth Management, a US firm, does not think that private market activity has lost momentum. Verma is based in Dallas, Texas.

“I do not believe we have hit a peak. We see many more products being offered in the market, which I view as healthy as it often creates increased competition, greater transparency, fee suppression and expanded opportunities in general,” he said. 

“At Vardhan, we have generally been allocating up to 30 per cent, and while I do not expect that percentage to increase substantially, I expect it to moderately increase, perhaps by 5 per cent,” he continued.

“While I do think there is significant `indigestion’, much of this could have been avoided with better education up front, rather than resetting expectations after a client is already invested, which is generally not a smooth client experience,” Verma said. 

“Clients need to clearly understand that private markets are longer duration investments – often 10 to 12 years – and adjust their expectations accordingly. If that is not acceptable then private markets may not be the right investment vehicle for them.

“In addition, education needs to be ongoing – not just at the time of investment – including when to expect distributions, the associated tax implications, and emphasising how the investment fits within the overall portfolio. While an endowment or institution typically thinks in terms of decades, retail clients typically think by years. Therefore, it is essential to educate retail clients to recalibrate their timetable,” Verma continued.

He thinks private credit is going to be popular.

“Private credit offers a shorter time horizon, which is often preferable for those who do not want to commit to a 10-year duration,” Verma said.

“While private credit will be the most popular asset class, private equity is up and coming. As investors become more familiar with the private market space, they gain clarity on how private equity can fit into a diversified portfolio. Private equity is increasingly being packaged more attractively for retail clients,” Verma continued. “For example, there are now secondary offerings from firms like Blackstone that offer a soft close for three years rather than a 10-year hold window, which is generally more acceptable to family offices or endowments, and you are able to get liquidity much sooner than 10 years if needed.” 

Ballast
It seems that private markets/alternatives – a term that can also include commodities and precious metals such as gold – are seen as important portfolio “ballast” as well as source of returns in their own right. 

Lombard Odier said in its "Ten Convictions For 2026," published last week, that “commodities, particularly materials, are benefiting from AI and electrification trends, and gold from geopolitical fragmentation. Hedge funds and private equity can enhance portfolio diversification, and our currency preferences include an undervalued Japanese yen and a strengthening Chinese yuan.”

LGT Capital Partners drills into the details of alternative assets’ categories, saying that private credit, for example, has become a more mature area.

“Geographical, sector and strategy diversification are becoming increasingly important amid geopolitical fragmentation and shifting relative value across regions. European direct lending currently offers attractive risk-adjusted characteristics compared to the US, supported by lower leverage and stricter credit documentation. Flexibility across sub-strategies, including credit secondaries and specialty finance, remains key to navigating this evolving market,” the firm said. 

It likes property markets, but there is a somewhat cautious tone.

“Real estate fundamentals remain broadly supportive, with balanced supply and demand and a slowdown in new construction underpinning rental growth. At the same time, the sector is adjusting to structural changes in occupier demand, technology adoption and capital markets. Investors are increasingly focused on supply-constrained markets and assets with durable, improvable cash flows, while remaining selective across sectors such as residential, logistics, grocery-anchored retail and hospitality,” it said.

A hotspot is infrastructure – a term ranging from airports to power cables and AI data centres. 

“Infrastructure is positioned at the intersection of digitisation, electrification and demographic change. The rapid expansion of digital infrastructure, the energy transition and supply chain reconfiguration are driving significant capital needs across the sector. These trends are expanding the investable universe beyond traditional core assets and creating opportunities for more dynamic investment approaches, including value-add strategies and secondaries,” it said. 

Wrapping up its analysis, LGT noted that emerging market debt has potential as countries improve their public finances, and benefit from their currencies hardening against the dollar, and improved credibility on monetary policy.