The Big Question: How are you planning to use private assets in portfolios this year?
Allocations to private markets have risen sharply over the past 12 months and are forecast to reach around 30% of global assets under management by 2032.
With LTAFs set to be included in Stocks and Shares ISAs from April, and growing interest from younger investors, private markets will be a major focus again this year, with significant implications for portfolio construction and management.
How much are you looking to allocate to private markets, which areas look most attractive, and what does this mean for your publicly listed investments?
Richard Parfect, portfolio manager, Momentum Global Investment Management
Despite increased demand for private assets, the valuations of many high-quality, diversified investment trusts invested in property, infrastructure and private equity have stood on historically wide discounts to net asset value.
The reasons for this (bond yields, regulatory cost disclosure, shrinking investor base) have been widely reported in the last couple of years but those headwinds are now reversing.
We have been overweight the sector leading into that, with private equity a particular outperformer in 2025. Looking forward, we would expect property (REITs) and infrastructure to show relative strength.
Adam Norris, co-manager, CT Global Managed Portfolio trust
Through 2025 we have increased exposure to private equity trusts, but also through alternatives investing in private markets.
An example of the former includes The Schiehallion Fund, a Baillie Gifford managed trust, where we see clear ‘winners’ in some of its largest holdings, namely Elon Musk’s SpaceX (14% of the portfolio), which has achieved a valuation level rarely seen in private equity.
It is unlikely that recently launched LTAFs will be accessing these phenomenal growth companies at scale.
On the latter, we have introduced Pantheon Infrastructure – a trust which invests solely in private infrastructure companies, while paying a helpful semi-annual dividend to investors.
Nick Hyett, investment manager, Wealth Club
Private assets have always been a central part of our managed portfolios, with allocations ranging from 6-9%.
At the moment, we invest through publicly listed investment companies, including HarbourVest Global Private Equity and HgCapital Trust in private equity, and Pantheon Infrastructure and Brookfield Infrastructure Corporation in private infrastructure.
Over the next 12 months we expect to add exposure to private credit investment companies in our income model, benefitting from higher yields for a similar level of credit risk to public market debt.
Jim Caron, CIO, portfolio solutions group, Morgan Stanley Investment Management
We consider allocating 10% to alternatives funded by equities and fixed income. A healthy correction is currently underway in private market capital flows.
Attractive entry valuations in markets such as real estate, and heightened negotiating power for allocators, contribute to our positive outlook for private markets.
Additionally, we like the added diversification benefits that alternatives bring to what would otherwise be a traditional allocation to stocks and bonds where correlation risks have grown to historical heights over the recent years.
Tom Hepworth, portfolio manager, WTW
Our wealth and DC portfolios currently have limited exposure, which we aim to increase over time, while our multi‑asset portfolio is expected to maintain its c.35% allocation.
As investors weigh trade‑offs, innovations in access will be key to expanding exposure across private equity, private debt and real assets, helping newer investors manage broader portfolio construction needs. Liquid assets will fund this shift, which we expect will improve portfolio robustness and risk‑adjusted returns. However, strong bottom‑up implementation remains essential to realise the full benefits.
Trevor Greetham, head of multi asset, Royal London Asset Management
We are broadly diversified across real assets such as UK and overseas equities, fixed income to dampen volatility and act as a store of value, and commodities as a hedge against unexpected inflation.
Private assets are part of the same story. We hold commercial property, including the residential, healthcare and natural capital sectors, as an alternative growth driver.
We are also looking to add UK infrastructure investments and private asset-backed securities to our pension funds. We have about 10% of workplace pension assets invested in UK private markets and we would expect this exposure to rise over time.
Nicolas Bickel, group head of investment private banking, Edmond de Rothschild
We always suggest private equity to clients with sufficient wealth, low liquidity needs and a long-term horizon. This may vary between a 10-50% allocation depending on client appetite.
Selectivity in private equity is key to deliver consistent performance. Our focus lies on small- and mid-market segments, where we look for potential to build operational value creation and revenue growth through active management.
We target thematics around regionalisation, tech-enabled business services, energy and infrastructure service providers, in the US and in Europe.
Nancy Curtin, global CIO, AlTi Tiedemann Global
We favour private market evergreen opportunities with differentiated strategies. Examples include private equity focused on co‑investment opportunities and private credit accessing secondary and co-investment opportunities, both with significant preferential fees.
Drawdown capital is focused on access to constrained, top-quartile managers in private equity: buyout, growth and venture.
Anthony Leatham, head of investment trust research, Peel Hunt
We are positive on private markets, particularly private equity. Recent manager updates point to improving realisation activity, supported by a macro backdrop of falling interest rates.
Given the current discounts, we favour investment trusts, particularly at a time when buybacks and capital allocation policies are increasing.
Our recent playbooks highlighted HarbourVest Global Private Equity on a 25% discount and Oakley Capital Investments on a 25% discount. For income, Partners Group Private Equity trades on a 22% discount and offers a 6.5% yield.
For specialist private credit, BioPharma Credit trades on an 11% discount and offers a yield of c.12%. For more adventurous investors, Chrysalis Investments trades on 36% discount despite having recently proposed an orderly realisation programme.
Nathan Sweeney, CIO, multi-asset solutions, Marlborough Investment Given client demand, we expect private assets to become a growing component of multi-asset portfolios for UK investors. The inclusion of LTAFs in ISAs will broaden access, particularly for younger investors comfortable with long-term horizons. We see opportunities in private credit and energy-transition-aligned real assets, where return profiles remain attractive. This does not imply a shift away from public markets, but it raises the bar, as public assets must now prove their value versus increasingly accessible private alternatives. Our focus is on building resilient, future-fit portfolios that balance liquidity, return potential and structural trends across both public and private markets.
