Asset Allocation Models Emerging as Key Gateway to Retail Private Markets
As retail access to private markets accelerates, asset allocation models are poised to become the most effective entry point for advisors and their clients, according to Cerulli’s latest report, U.S. Private Markets 2025: Incorporating Private Market Investments into Model Portfolios.
Cerulli estimates that U.S. financial advisors currently allocate $1.9 trillion to less-than-fully-liquid private market strategies and projects this will grow to $3.7 trillion by 2029—a $1.7 trillion expansion opportunity. “Advisors are contributing pools of assets amounting to tens of billions of dollars to individual managers,” said Daniil Shapiro, director at Cerulli.
As asset and wealth managers look to mainstream private markets, they are increasingly embedding strategies into model portfolios that offer simplified access, standardization, and scalability. The report highlights that while managers are driving product development, turnkey asset management platforms (TAMPs) and alternative investment distribution platforms will play a critical role in building the infrastructure across channels.
Asset managers see several paths to model placement: 48% identify opportunities in model-adjacent multi-manager products, 44% in paper models, and 41% in unified managed account (UMA) platforms. Semi-liquid products within UMAs are expected to play a central role, offering the liquidity and diversification advisors need, but Cerulli also emphasized the importance of paper models and single-ticket solutions as likely access points for advisors and their clients.
Ultimately, Cerulli found that advisors are seeking more tools to understand how various private market strategies can complement one another within a broader portfolio. As Shapiro noted, “Advisors are looking for help in understanding how multiple private market asset classes can come together and complement one another. Such tools can be extremely helpful even if advisors do not subscribe to them outright.” This underscores the conclusion that model-based delivery will be instrumental in mainstreaming private markets, balancing accessibility with education and risk management for the retail segment.