Key Takeaways
- • Global alternatives AUM is forecast to reach US$29.2 trillion by 2029 and exceed US$30 trillion by 2030, up from US$16.8 trillion at end-2023, representing a 9.7% annualized growth rate over the forecast period.
- • Private equity will remain the dominant asset class, with AUM expected to more than double from US$5.8 trillion (end-2023) to US$12.0 trillion by 2029, growing at a 12.8% annualized rate.
- • Secondaries strategies are positioned as the fastest-growing alternatives segment, projected to expand at 13.1% annualized growth, driven by liquidity constraints in investor portfolios and rising private wealth demand for secondaries as an entry point to private markets.
- • The alternatives industry's forecasted 9.7% growth rate represents a slowdown from the 10.5% growth achieved in 2017–2023, reflecting softer expectations for private equity and venture capital amid anticipated challenging macroeconomic conditions and geopolitical risks.
- • Private wealth continues to emerge as a key growth driver for alternatives, with individual investors gaining increased access to alternative strategies as the sector evolves.
Summary
The global alternatives industry is positioned for substantial expansion over the next five to six years, with assets under management forecast to exceed US$30 trillion by 2030, according to Preqin's Future of Alternatives 2029 report. This represents a significant increase from US$16.8 trillion recorded at the end of 2023, translating to an annualized growth rate of 9.7% through 2029. However, this growth pace marks a deceleration from the 10.5% annualized growth rate achieved during the 2017–2023 period, reflecting more conservative market expectations for private capital segments.
Private equity is expected to maintain its position as the cornerstone of the alternatives asset class, with projected assets more than doubling to US$12.0 trillion by 2029 from US$5.8 trillion at end-2023. This expansion corresponds to a 12.8% annualized growth rate and underscores the continued importance of private equity within institutional and alternative investor portfolios. Despite the strength of private equity fundamentals, the slowdown in overall alternatives growth reflects anticipated headwinds in venture capital markets and broader macroeconomic challenges.
Secondaries strategies are identified as the fastest-growing segment within alternatives, forecast to expand at 13.1% annualized growth. This outperformance is driven by current market dynamics characterized as a buyer's market, with investment portfolios facing liquidity pressures. Preqin expects sustained demand for secondaries from the private wealth channel, particularly among investors new to private markets, as secondaries offer structural advantages for diversification and liquidity management.
Cameron Joyce, global head of research insights at Preqin, emphasized that the evolving alternatives landscape reflects broader shifts in investor accessibility and demographic trends. He noted that while policy rates are expected to decline, macroeconomic conditions are likely to remain more challenging than the pre-pandemic era, and investors must navigate evolving geopolitical risks within an emerging multipolar world order—a backdrop that presents both investment opportunities and risks for alternative asset managers and their investors.
Private equity is expected to maintain its position as the cornerstone of the alternatives asset class, with projected assets more than doubling to US$12.0 trillion by 2029 from US$5.8 trillion at end-2023. This expansion corresponds to a 12.8% annualized growth rate and underscores the continued importance of private equity within institutional and alternative investor portfolios. Despite the strength of private equity fundamentals, the slowdown in overall alternatives growth reflects anticipated headwinds in venture capital markets and broader macroeconomic challenges.
Secondaries strategies are identified as the fastest-growing segment within alternatives, forecast to expand at 13.1% annualized growth. This outperformance is driven by current market dynamics characterized as a buyer's market, with investment portfolios facing liquidity pressures. Preqin expects sustained demand for secondaries from the private wealth channel, particularly among investors new to private markets, as secondaries offer structural advantages for diversification and liquidity management.
Cameron Joyce, global head of research insights at Preqin, emphasized that the evolving alternatives landscape reflects broader shifts in investor accessibility and demographic trends. He noted that while policy rates are expected to decline, macroeconomic conditions are likely to remain more challenging than the pre-pandemic era, and investors must navigate evolving geopolitical risks within an emerging multipolar world order—a backdrop that presents both investment opportunities and risks for alternative asset managers and their investors.
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