Key Takeaways
- • Private market assets under management reached $11.8 trillion in 2023, more than tripling over the last decade, according to the World Economic Forum article; Preqin projects AUM will surpass $18.3 trillion by 2027.
- • A third annual WEF investor survey, conducted in September 2023, found 88% of respondents plan new private market allocations in the next 12 months, up six percentage points from the prior year.
- • Buyouts remain the most held strategy, with 83% of respondents owning stakes, a 16-point increase versus 2022; ownership of secondaries funds rose about 10 points to nearly 42%.
- • Income-oriented strategies gained ground, with private infrastructure ownership rising from 15% of respondents last year to almost a quarter in 2023.
- • Respondents remain pessimistic on the macro outlook: 46% reported a "bad feeling" about economic conditions and only 16% felt optimistic.
Summary
Private markets, defined as equity or debt not traded on public exchanges, are broadening beyond pension funds, endowments and other large institutions to include individual investors. According to the World Economic Forum, private market AUM has more than tripled over the past decade to $11.8 trillion in 2023, and Preqin forecasts AUM will exceed $18.3 trillion by 2027. The WEF attributes the shift to regulatory and technological change, including a recent revamp of the European Long-Term Investment Fund framework that could open private markets to everyday investors with some caveats. Digital platforms are also facilitating this "retailization"; Berlin-based Moonfare, for example, has enabled more than 3,800 people worldwide to access private equity, venture capital and secondaries.
The WEF's third annual Investor Survey, fielded in September 2023, indicates that diversification is the leading priority: 46% of respondents cited it as a top agenda item amid rising rates and inflation, ahead of increasing cash reserves and becoming more active investors. Many respondents already have substantial exposure, with roughly 26% allocating 21% to 50% of their portfolios to private assets, a level the WEF describes as comparable to pension funds, endowments and foundations. Traditional strategies remain core, with buyouts the most widely held. Income-oriented strategies are gaining interest, particularly infrastructure, which the WEF notes may offer inflation hedging and lower volatility, and private credit.
Despite strong allocation intentions, sentiment on the broader economy is weak. The survey found 46% of respondents have a "bad feeling" about economic conditions, while only 16% are optimistic, though this represents an improvement from the prior year, which was dominated by recession concerns and interest-rate hikes. Half of respondents expect current conditions to persist for one to two more years, while 28% anticipate a downturn of six to 12 months followed by recovery. The WEF's Future of Capital Markets initiative, developed with Accenture and chaired by Lazard, is examining how to broaden retail access to private markets responsibly; the resulting white paper lists contributors including Apollo, AXA, Carta, Moonfare, J.P. Morgan, Partners Group and Robinhood.
The WEF's third annual Investor Survey, fielded in September 2023, indicates that diversification is the leading priority: 46% of respondents cited it as a top agenda item amid rising rates and inflation, ahead of increasing cash reserves and becoming more active investors. Many respondents already have substantial exposure, with roughly 26% allocating 21% to 50% of their portfolios to private assets, a level the WEF describes as comparable to pension funds, endowments and foundations. Traditional strategies remain core, with buyouts the most widely held. Income-oriented strategies are gaining interest, particularly infrastructure, which the WEF notes may offer inflation hedging and lower volatility, and private credit.
Despite strong allocation intentions, sentiment on the broader economy is weak. The survey found 46% of respondents have a "bad feeling" about economic conditions, while only 16% are optimistic, though this represents an improvement from the prior year, which was dominated by recession concerns and interest-rate hikes. Half of respondents expect current conditions to persist for one to two more years, while 28% anticipate a downturn of six to 12 months followed by recovery. The WEF's Future of Capital Markets initiative, developed with Accenture and chaired by Lazard, is examining how to broaden retail access to private markets responsibly; the resulting white paper lists contributors including Apollo, AXA, Carta, Moonfare, J.P. Morgan, Partners Group and Robinhood.
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