86% of Global Asset Owners Invest in Private Markets: Report

New research reveals that 86% of global asset owners invest in private markets, comprising 13% of their portfolios on average. Northern Trust’s study of 180 asset owners worldwide, including pension funds, family offices, and sovereign wealth funds, highlights their focus on diversifying investments across public and private assets.

On average, public equities make up 42% of asset owners’ portfolios, followed by fixed income at 27% and private markets. Among those investing in private markets, 67% own private equity, the top alternative asset, followed by commercial real estate (55%), private credit and direct lending (49%), and residential real estate (46%).

“The growth of private debt within the broader private markets landscape over the past decade cannot be overstated, with this area of fixed income now a mainstay in many institutional portfolios,” the report said.

In private debt, 45% of investors allocate to asset-backed products, 39% to real estate debt, and 37% to both preferred equity and senior direct private debt, as well as structured products.

Northern Trust’s study revealed that larger institutions are more drawn to specialized areas like infrastructure debt and special situations than smaller investors.