Key Takeaways
- • Private equity increasingly attracts capital as deal-by-deal investment structures gain traction, offering investors greater control over capital deployment compared to traditional fund-based models.
- • Private markets assets under management are forecast to reach £65 trillion by 2032, growing at roughly twice the rate of public markets, with private equity expected to lead this expansion.
- • Geopolitical tensions—including Russia's war in Ukraine and recent Iran-related conflicts—have driven renewed investor interest in private markets as a hedge against public market volatility tied to macroeconomic uncertainty.
- • Local and regional networks providing on-the-ground intelligence and extensive advisor relationships are critical competitive advantages for private equity firms seeking to source the most attractive deal opportunities.
- • Private equity serves as a key component of portfolio diversification, offering lower correlation with traditional equities and bonds that remain sensitive to broader market movements.
Summary
The private equity sector is experiencing heightened investor interest amid volatile public market conditions, according to Victoria McGurran, Director of Private Client Relations at Maven Capital Partners. While major indices including the FTSE 100 and S&P 500 reached record highs earlier in 2026, subsequent geopolitical tensions and rising oil prices have reintroduced significant volatility, prompting institutional and alternative investors to reassess their capital allocation strategies toward private markets.
Within private equity specifically, a notable shift is occurring toward deal-by-deal investment structures rather than traditional fund-based vehicles. This approach grants investors substantially greater control over capital deployment decisions, allowing for more granular portfolio construction aligned with individual risk tolerances and return objectives. Private equity firms with established national and regional networks—capable of delivering on-the-ground intelligence and maintaining extensive advisor relationships—are best positioned to identify and source the most compelling opportunities in this environment.
Geopolitical risk has become a material driver of private market inflows. Russia's ongoing war in Ukraine combined with recent escalations involving Iran have created sustained public market sensitivity to headline risk and macroeconomic uncertainty. This environment has accelerated the broader shift toward private assets, with total assets under management across private markets projected to reach £65 trillion by 2032, growing at approximately twice the rate of public market assets. Private equity is expected to lead much of this expansion.
From a portfolio construction perspective, private equity fulfills an important diversification function. Traditional asset classes—equities and bonds—exhibit high correlation with broader market movements, amplifying downside risk during systemic stress periods. Private equity investments, by contrast, operate with lower correlation to public markets, providing defensive characteristics during periods of elevated volatility. This structural advantage, combined with the ability to deploy capital through direct deal participation rather than pooled vehicles, positions private equity as an increasingly central component of institutional and family office portfolios navigating uncertain investment times.
Within private equity specifically, a notable shift is occurring toward deal-by-deal investment structures rather than traditional fund-based vehicles. This approach grants investors substantially greater control over capital deployment decisions, allowing for more granular portfolio construction aligned with individual risk tolerances and return objectives. Private equity firms with established national and regional networks—capable of delivering on-the-ground intelligence and maintaining extensive advisor relationships—are best positioned to identify and source the most compelling opportunities in this environment.
Geopolitical risk has become a material driver of private market inflows. Russia's ongoing war in Ukraine combined with recent escalations involving Iran have created sustained public market sensitivity to headline risk and macroeconomic uncertainty. This environment has accelerated the broader shift toward private assets, with total assets under management across private markets projected to reach £65 trillion by 2032, growing at approximately twice the rate of public market assets. Private equity is expected to lead much of this expansion.
From a portfolio construction perspective, private equity fulfills an important diversification function. Traditional asset classes—equities and bonds—exhibit high correlation with broader market movements, amplifying downside risk during systemic stress periods. Private equity investments, by contrast, operate with lower correlation to public markets, providing defensive characteristics during periods of elevated volatility. This structural advantage, combined with the ability to deploy capital through direct deal participation rather than pooled vehicles, positions private equity as an increasingly central component of institutional and family office portfolios navigating uncertain investment times.
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