LPs Stay Committed to Private Markets but Grow More Selective: Goldman Sachs
Institutional investors are sticking with private markets despite a long list of risks, but they are becoming more careful about where they put money and with which managers, according to Goldman Sachs Asset Management’s 2026 Global Alternatives Survey.
The survey of 225 limited partners and other institutional investors worldwide, conducted from June through August, found investors “rethinking, not retreating.”
“What we’re seeing this year isn’t hesitation, it’s discipline,” said Marc Nachmann, Goldman Sachs’ global head of asset and wealth management.
Geopolitics ranked as the top investment risk for the third straight year. Eighty-two percent of respondents put it among their top five risks, and 36% named it the single greatest risk. Inflation, a possible U.S. slowdown and deteriorating liquidity followed.
Still, deployment plans held steady. Thirty-seven percent of investors expect to commit more capital than last year, 47% plan to keep the same pace and just 11% expect to deploy less.
The main constraint is cash coming back. A lack of distributions was the most cited factor shaping deployment plans, at 35%, followed by changes to allocation targets at 29%. Liquidity was also the top challenge in private equity.
Investors see the most room to grow in private credit and infrastructure, where nearly half remain below their target allocations. Infrastructure drew the strongest sentiment, with 43% reporting a more favorable outlook and only 7% a less favorable one. Private credit saw the largest rise in negative sentiment, though 65% still said opportunities were as good or better than a year ago.
Secondaries and co-investments are becoming core portfolio tools. Positive views of secondaries outnumbered negative ones nearly 3 to 1. Interest in hedge funds is also returning, with 34% reporting a more favorable outlook.
Investors expect artificial intelligence to reshape the industry. Thirty-four percent named AI the biggest driver of change over the next five years, far ahead of industry consolidation at 13%.
Manager selection is getting tougher. Most commitments went to existing managers, and 78% of investors cited track record as the top factor when choosing a new one. Some respondents said they are trimming U.S. exposure in favor of Europe.