Shifting Client Demand Is Reshaping Private Markets

Private markets are becoming an integral component of individual investor portfolios. In our latest survey, 70% of financial advisors expect client allocations to increase over the next three years (up from 67% last year).

This shift is supported by strong structural tailwinds. Global private equity assets under management (AUM) is projected to nearly double to $11.8 trillion by 2030 (from $5.8 trillion in 2023),⁴ with much of the growth driven by private wealth. Expanded access and generational wealth transfer are accelerating adoption.

As Preqin notes, younger investors are likely to view private markets as a standard component of long-term portfolios, alongside public investments.⁵

Managers are responding with more accessible structures—offering periodic liquidity, lower minimums, and simplified entry points. As allocations rise, disciplined portfolio construction, liquidity management, and investor education will be critical to successful implementation.

Key Factors When Recommending Private Markets to Clients

“Clients often ask whether private markets are a diversification play or an outperformance play,” says Cyrille Flichy, Head of Private Markets at Banque Cantonale de Genève. “We increasingly see them as a diversification tool as the potential performance across liquid and illiquid markets converges.”

Advisors increasingly view alternatives as a way to manage risk and provide diversification while preserving return potential.

Nearly nine in 10 advisors expect private markets to outperform public markets over the long term, while 95% say clients are satisfied with the performance of their private market investments.

“The best thing to do for a client is to show private markets’ diversification and low correlation to public equity markets,” says Stephen Biggs, Managing Director and Head of Alternative Investments at The Mather Group, a Chicago-based firm. “The diversification story is carrying more weight right now than the return story.”

Evergreen Structures: Broadening Access and the Semi-Liquid Boom

Semi-liquid vehicles are reshaping how private markets exposure is delivered—helping balance liquidity, complexity, and client expectations. Managers are expanding offerings across structures such as business development companies (BDCs), European Long-Term Investment Funds (ELTIFs), and other evergreen funds, particularly in the US and Europe.

These vehicles sit between closed-end funds and mutual funds, offering periodic liquidity alongside long-term exposure. Growth has been rapid – there are 726 semi-liquid funds as of mid-2025 and the category has expanded ~18% annually over the last 15 years, according to Preqin.⁶ Nearly half of advisors (49%) now view them as the most suitable structure for clients.

“To build a fully diversified program through drawdown funds, it can take five years or more before capital calls have a meaningful impact,” says Stephen Biggs, Managing Director and Head of Alternative Investments at The Mather Group, a Chicago-based firm. “With semi-liquids, you get instant exposure, and then you can build a flagship drawdown fund around it.”

Advisors value diversification, simpler fees, improved tax reporting, and immediate deployment versus drawdown funds. Periodic liquidity is also attractive—though often more psychological than essential for long-term investors.

Still, structural differences matter. Features like lock-ups, redemption limits, and gating mechanisms are critical to managing liquidity risk and aligning investor expectations with the underlying assets.

Structural Implications for Advisors and Private Markets

The influx of retail capital is intensifying competition, with flows likely concentrating among larger managers that can meet the operational, liquidity, and reporting needs of advisor-led portfolios.

This raises a key risk: pressure to deploy capital too quickly, potentially diluting returns. As the market scales, disciplined pacing, strong underwriting, and tight alignment between fundraising and opportunity sets will be critical to performance. Structuring products around advisor and client needs—including clear timelines and investment horizons—will also matter more.

Investor education remains a constraint. Content can overwhelm newer investors, especially when it leans promotional. While advisor expertise is rising—58% now report advanced private equity knowledge—gaps at the client level persist, reinforcing the need for clear, targeted education.

“General partners can always do a better job of tailoring their model to wealth managers,” says Thomas Cohn, Partner and Chief Solutions Officer at Cerity Partners. “It’s essential to understand how each wealth business operates—how research and investment functions interact, and how advisors prefer to consume information.”