Key Takeaways
- • BBH's second annual Private Markets Investor survey finds 84 per cent of institutional investors and wealth advisors intend to increase private markets investments within the next two years.
- • Private equity is the top target for new capital at 54 per cent, up 16 points year-over-year, while private credit stands at 44 per cent, up 20 points.
- • More than a quarter of respondents expect to allocate over 30 per cent of their investments to private markets strategies within five years.
- • Three out of four investors say the time required to get capital returned has lengthened over the past year, shifting preferred deployment windows to four to six years.
- • Investors are demanding clearer liquidity calculations, redemption rules and gating criteria, with more than three-quarters relying on general partners or advisors for support.
Summary
Institutional investors and wealth advisors are leaning further into private markets, according to a new survey from Brown Brothers Harriman (BBH). The second annual Private Markets Investor survey, covering 500 institutional investors and wealth advisors in the US, the UK, Germany, Switzerland and Japan, found that 84 per cent intend to increase their private markets exposure within the next two years. Private credit ranks among the strategies with the strongest growth prospects. More than a quarter of respondents expect to allocate over 30 per cent of their portfolios to private markets strategies over the next five years.
Private equity remains the most sought-after target, cited by 54 per cent of those planning to grow their private markets holdings, up 16 points from the prior year. Private credit followed at 44 per cent, up 20 points year-over-year. BBH noted that private markets are becoming increasingly central to overall portfolios, while liquidity has emerged as a top priority.
The survey indicates investors' preferred capital deployment window is four to six years, followed by a shorter two to three year window. BBH attributed the tighter timeframes to the fact that three out of four private market investors said the time required to get capital returned has grown longer over the past year. BBH identified a "clear call" from investors for more reliable reporting of liquidity calculations and clearer redemption rules and gating criteria. More than three-quarters are turning to general partners or advisors to improve their understanding of these features. Investors also said improved transparency into underlying holdings and greater liquidity and trading efficiency would accelerate adoption of innovative structures and products.
Lata Vyas, head of alternative client solutions at BBH, said investors "are leaning into private markets, and macro and geopolitical uncertainty is only strengthening that conviction," while becoming more discerning about how redemptions are governed. Chris Adams, global head of business development for alternative funds services at BBH, said managers who succeed will pair liquidity-providing structures such as evergreen funds with clear rules, real transparency and a commitment to investor education.
Private equity remains the most sought-after target, cited by 54 per cent of those planning to grow their private markets holdings, up 16 points from the prior year. Private credit followed at 44 per cent, up 20 points year-over-year. BBH noted that private markets are becoming increasingly central to overall portfolios, while liquidity has emerged as a top priority.
The survey indicates investors' preferred capital deployment window is four to six years, followed by a shorter two to three year window. BBH attributed the tighter timeframes to the fact that three out of four private market investors said the time required to get capital returned has grown longer over the past year. BBH identified a "clear call" from investors for more reliable reporting of liquidity calculations and clearer redemption rules and gating criteria. More than three-quarters are turning to general partners or advisors to improve their understanding of these features. Investors also said improved transparency into underlying holdings and greater liquidity and trading efficiency would accelerate adoption of innovative structures and products.
Lata Vyas, head of alternative client solutions at BBH, said investors "are leaning into private markets, and macro and geopolitical uncertainty is only strengthening that conviction," while becoming more discerning about how redemptions are governed. Chris Adams, global head of business development for alternative funds services at BBH, said managers who succeed will pair liquidity-providing structures such as evergreen funds with clear rules, real transparency and a commitment to investor education.
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