Almost all investors expect to increase their private market allocations. This is driven by the potential for long-term income and higher returns. These factors make private markets a source of attractive returns. They also serve as a hedge against public market volatility.
Private equity and venture capital continue to be the main focus. Many investors plan to increase their exposure here. Alongside equity, private credit and infrastructure are seeing strong demand. They are valued for yield and long-term income stability. Real estate remains a key allocation, though growth has slowed.
As allocations grow, operational challenges are a key concern. Most firms see automation and digitalisation as top priorities for scaling. Many also highlight the need for data integration and analytics. The goal is to achieve efficiencies through technology and outsourcing.
Technology is now seen as essential in private markets. More than half of firms view AI-driven insights as a critical investment. This is followed by improvements in data infrastructure. The aim is to move from manual processes to real-time insights across assets.
Private markets are entering a new stage of growth. This phase is defined by more than just expanding allocations. It requires operational resilience and technological innovation. It also needs a more inclusive base of investors.
For this whitepaper, HSBC has worked with Global Custodian, a leading editorial voice of the securities services industry to run a survey with 114 market participants including financial sponsors (33%) and global multi-asset managers (32%) make up the largest contributors, with their views complemented by hedge funds (11%), insurers (8%), and other participants, including pension schemes (4%), development banks (4%), and private banks (4%). More than half (56%) of firms surveyed operate in the Americas, while 47% have a footprint in Europe. A quarter (25%) of organisations have a presence in Asia-Pacific, and a further 18% in the MENA region.
Data was collected through online questionnaire and the survey ran from May-June 2025
