Financial advisers report growing demand for private markets investments, with 67 per cent anticipating an increase in clients with an allocation to the asset class over the next three years.
Nearly 7 per cent predicted the percentage of clients with alternative holdings will increase by more than 20 per cent, reflecting growing familiarity and deeper engagement with alternative strategies.
The findings, in Adams Street Partners’ 2025 Advisor Outlook, highlight an accelerating shift towards private markets as wealthy individuals seek diversified investment opportunities.
Read more: Majority of global investors allocating to private markets
Of the more than 100 financial advisers across North America, Europe, and Asia who responded to the survey, most (65 per cent) stated at least 10 per cent of their clients currently had private market investments.
Almost all (92 per cent) of financial advisers asked expected private markets to outperform public markets over the long term.
“Private markets are becoming an essential part of a well-diversified portfolio, and financial advisers are on the front lines of this shift,” said Jim Walker, partner and global head of wealth at Adams Street.
However knowledge gaps persist as a potential barrier to investing when it comes to private credit.
While 47 per cent of advisers said they had ‘advanced’ knowledge of private credit, this fell to just 23 per cent when asked about their clients, lower than for private equity and real estate (both 32 per cent).
Yet 39 per cent of advisers said they believed their clients had ‘competent’ knowledge of private credit – the highest figure for that category across private equity, real estate, venture capital and infrastructure.
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Individual investors account for about $2.7tn (£2tn), or one-fifth, of the $14tn in private market assets under management, according to Morgan Stanley.
This is projected to rise to 37 per cent within five years, signalling a shift in capital flows and a growing democratisation of private markets investing.
“Individual investors are playing an increasingly vital role in the evolution of private markets,” said Jeffrey Diehl, managing partner and head of investments at Adams Street.
While complexity, limited access, and tax reporting preferences have historically limited private market participation, advisers reported meaningful progress in addressing those barriers.
Structures such as semi-liquid evergreen funds and digital platforms, along with an increasingly favourable regulatory environment, are expanding the reach of private investments.
Almost half (44 per cent) of advisers prefer evergreen structures to traditional closed-end funds (37 per cent). Over half cite broader client access as a primary benefit of these vehicles.
“As access expands and product innovation accelerates, we see a meaningful opportunity to deliver differentiated returns through high-quality private equity and private credit investments – strategies traditionally reserved for institutional portfolios,” Diehl added.
Read more: BlackRock sees $7.1bn of inflows into private markets in Q1
Technology is seen as a key investment sector in 2025 for 58 per cent of advisers, followed by financial services (42 per cent).
North America-based advisers report that clients prioritise wealth preservation and tax efficiency, while those in Europe emphasise access to new investment opportunities. In Asia, advisers highlight private markets’ ability to drive income and diversification.