A deeper pool of global capital is becoming available for private markets fund managers to swim in. Once firmly the preserve of institutional money, now retail investors and the wealth market are also taking a serious look at alternative asset classes.

That is the broad take-away of a 2025 research report published by Apex Group, Leading the Shift: Transforming Private Markets in a Retail-driven Landscape, which surveyed more than 100 senior executives in the asset management industry to take the temperature of retail interest in private markets. And it seems the thermometer is firmly in very warm territory – 97 percent of respondents report either significant or some appetite from retail investors to commit to private funds and 86 percent believe alternatives will form a significant slice of retail investors’ portfolios within the next five years.

These findings are supported by data published in 2025 by other major industry players. State Street’s annual Private Markets Study, for example, shines a light on the predicted shift from the reliance on traditional institutional capital toward retail. Just 39 percent of respondents to the 2025 study – which included private markets managers, generalist asset managers with private markets portfolios and institutional asset owners – believe capital commitments will remain weighted to the institutional segment of the market over the next one to two years, compared with over half (51 percent) in the 2024 study.

This shift “could potentially reshape the private markets fundraising landscape quite significantly”, says Sven Eggers, head of private markets for Europe and Germany country head at State Street. “Managers need to think about how they can participate in this new market, whether through new launches of their own products, or partnerships with other providers.”

Eggers notes that distribution channels will also become an important consideration for managers launching retail products. “These funds will be sold through a range of channels that don’t feature in traditional, deal-based, institutional private markets investments – for example, wealth management platforms and defined contribution pension platforms – and they’ll need to ensure their products reach the investors who use these mechanisms.” 

Trend drivers

The opportunity for better returns is likely a significant factor driving the pivot to private markets. An Adams Street Partners report published this year, The Rise of Private Wealth in Private Markets, found that 92 percent of the financial advisers they surveyed believe private markets will outperform public markets over the long term.

Meanwhile, 42 percent of respondents say their private wealth clients prioritise new investment opportunities, followed by wealth preservation (40 percent) and maximising their income (37 percent). It is perhaps not surprising then that 67 percent of respondents expect the percentage of their clients invested in private markets to increase over the next three years.

Of the various flavours of alternatives available, private equity stands to benefit most from the democratisation trend, according to the State Street report: 42 percent of respondents cite PE as the most likely to benefit, compared with 25 percent for private debt and 16 percent for infrastructure. “[Private equity] is the biggest asset class and more managers invest in it already, so it’s likely to see more total expansion towards new investor types,” explains Eggers.

But Eggers adds that there are good reasons to believe asset classes such as infra and real estate will also benefit over time. “The incentives for governments to create a beneficial environment for these new sources of flows to private markets are they support domestic economic agendas by bringing money into public expenditure priority areas – infrastructure, housing – and industries that are strategic and economic priorities, like tech, defence and energy.”

Despite a bumpy couple of fundraising years, the future appears to be looking bright for private markets as its reach extends beyond traditional institutional capital.

This article forms part of our Private Markets 2030 coverage – a deep dive into six key trends shaping the alternatives industry over the next five years.