A new report points to rising maturation of the field, but also notes the stresses recently in the private credit space.

MSCI, the index provider, said in its inaugural report on private markets that the sector is entering a new phase of maturity.

MSCI unveiled its inaugural State of Private Markets 2026 report, which said private markets are maturing, marked by rising demand for transparency, persistent liquidity constraints and a growing need to evaluate investments within a total-portfolio framework.

“The asset class works, but the infrastructure supporting it has not kept pace with its scale,” Luke Flemmer, head of private assets at MSCI, said. “Liquidity pressure, uneven confidence in markets and recent stress in private credit are all rooted in a structural lack of transparency. Investors need to know what they own, what those investments are worth and where risk lies to successfully manage public and private assets together.”

The report noted that stresses in private credit are a worry. It said that “semi-liquid” structures, such as those offering periodic redemptions based on manager-reported valuations, increase scrutiny on how accurate and timely those valuations are. (Such structures are also called “evergreen.”) There are more signs of borrower strain, particularly among smaller funds, the report said.

In private equity, the MSCI report identifies a continued slowdown in exits and distributions that is contributing to a more challenging fundraising environment as well as a growing reliance on secondary markets and continuation vehicles to generate liquidity. In a more buoyant tack, the report said the expansion of AI infrastructure is creating “significant investment opportunities across private markets.”

“From data centres to software and energy systems, AI-related investments are cutting across asset classes, reinforcing the need for more granular, integrated analysis of portfolio exposures,” it said.

There has been a torrent of reports and commentaries about private markets and "alternative" investment - a category that includes hedge funds, which aren't strictly an asset class but a way to operate in markets.

Last October, a survey by the asset management arm of Goldman Sachs found that HNW and ultra-HNW individuals are more likely to put alternative assets into their portfolios as they get richer, suggesting that people with rising wealth are more comfortable about holding illiquid assets.

A poll of 1,000 investors for Goldman Sachs Asset Management, carried out in July and August last year, found that 91 per cent of those surveyed who have $20 million or more in wealth hold alternative assets such as private equity, hedge funds, private credit, forms of real estate and venture capital. While a fifth of net worth remains in cash for preservation and flexibility, 80 per cent of individuals with over $10 million in investable assets use alternatives, compared with 39 per cent for those with $1 to $5 million, GSAM said.

“Millennials show greater familiarity and higher allocations to alternatives. They view public equities as riskier compared to how older generations view stocks. They are also more motivated by access to innovation and unique opportunities, which we believe is signalling a future where alternatives play a central role in portfolio construction,” GSAM said in in its report, entitled Opening The Door To Alternatives.

The private markets space has been roiled by worries of defaults and exposures among private credit funds although, as this publication has heard, some players dispute claims of a systemic problem. There have been several redemptions from private credit funds in recent weeks, for example.