Private Markets Boom: New Frontier for Wealthy Investors — Evening Brief – 04.15.25
Private markets are experiencing a surge in popularity among financial advisors and their wealthy clients, marking a significant shift in investment preferences. According to Adams Street Partners’ 2025 Advisor Outlook, 67% of advisors expect an increase in clients allocating to private markets over the next three years. This growing demand reflects a broader trend toward diversification and the pursuit of higher returns beyond traditional public markets.
The survey, which included over 100 advisors from North America, Europe, and Asia, reveals a deepening engagement with alternative investments. Nearly 7% of advisors predict a substantial rise—over 20%—in clients holding private market assets, signaling increased familiarity and comfort with these strategies. Currently, 65% of advisors report that at least 10% of their clients have private market investments, underscoring the asset class’s growing foothold. Even more striking, 92% believe private markets will 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,” notes Jim Walker, partner and global head of wealth at Adams Street.
Despite the enthusiasm, challenges remain—particularly around expertise. Private credit, a key segment of private markets, highlights this gap. While 47% of advisors claim “advanced” knowledge of private credit, only 23% say the same of their clients—lower than the 32% for both private equity and real estate.
However, 39% of advisors believe their clients possess “competent” knowledge of private credit, the highest such figure among alternative asset categories (including venture capital and infrastructure). This disparity suggests that while advisors are ahead, client education remains a barrier to broader adoption.
Individual investors are driving much of this momentum. They currently hold $2.7 trillion, or one-fifth, of the $14 trillion in private market assets under management, per Morgan Stanley estimates. That share is projected to climb to 37% within five years, reflecting a significant shift in capital flows and a democratization of access to private markets.
“Individual investors are playing an increasingly vital role in the evolution of private markets,” says Jeffrey Diehl, managing partner and head of investments at Adams Street.
Historically, complexity, limited access, and tax reporting challenges have deterred participation in private markets. But progress is evident. Innovations like semi-liquid evergreen funds and digital platforms, coupled with a more favorable regulatory environment, are lowering the entry bar. Notably, 44% of advisors now favor evergreen structures over traditional closed-end funds (37%), with over half citing “broader client access” as a top advantage.
Looking ahead to the remainder of 2025, advisors are eyeing specific sectors for growth. Technology tops the list, favored by 58% of respondents, followed by financial services at 42%. North American advisors note clients focus on wealth preservation and tax efficiency, European advisors emphasize access to new investment opportunities, and Asian advisors highlight private markets’ potential for income and diversification.