Despite all the hype about private assets, allocations remain stubbornly low — signs that this market is not an easy one to master

Private markets remain flavour of the season, if not the last decade. Not only have the ravages wrought in public markets by geopolitical and economic storms made ‘going private’ more appealing, but the massive liquidity which flooded unlisted assets in response to these crises have left this space easier to navigate.

Expertise in managing these investments will be key to the future success of wealth managers and private banks, believe many commentators, including Vineet Vohra, former senior Citi banker, managing partner at the Leader Circuit consultancy in Singapore, and PWM awards judge.

The way which these investments are explained and packaged to key target audiences — women, entrepreneurs, millennials and industrialists — will prove a further determinant of market triumph.

Yet despite all the hype about private assets — from both wealth and asset managers — allocations are not rising as fast as their often-evangelical promoters would have us believe.

Against critical talk of a potential bubble or 2008-style liquidity crisis, we are constantly being told — by people who should know better — that “this time will be different”. Family offices and other wealthy clients are regularly being urged to ramp up allocations to unsafe levels.

Deeper conversations tell a different story to dramatic headlines. During a recent behind-closed doors session at FT headquarters in London, a coterie of wealth managers, though interested in potential allocations, admitted they were yet to take the plunge. They felt wary of over-promotion and suspicious about lack of liquidity and expertise.

A similar message was communicated from the Global Wealth Study 2025, released by the Thinking Ahead Institute, which surveyed 150 wealth firms working across 27 countries, overseeing more than $15tn in assets.

The 250 investment professionals interviewed blamed absence of liquidity, transparency problems and excessive cost for their lack of faith in these assets. This dichotomy between claims and reality is a stark one.

Slim pickings

Expertise in managing private assets is cited by most entrants to PWM’s Global Private Banking Awards for 2025 as a key differentiator of their bank from competitors. But a gentle scratch under the surface shows only a handful of players have any serious expertise or vision. Leading innovators in these alternative assets include J.P. Morgan, LGT, UBP and Northern Trust, but outside a handful of major firms, few others show any real talent in this sphere.

As the lines between private and public continue to blur, only wealth managers that can “operationalise” private markets exposure for their clients will gain a clear performance and fee advantage, states Matthias Schulthess, a former senior banker at UBS in Asia, who co-founded Munich-based search and advisory firm SZ&J.

Success the way he sees it means increasing private market allocations from today’s typical 3 to 5 per cent to nearer 25 per cent at portfolio level.

To meet their “fiduciary duty”, the industry must strengthen adviser education and client communication on liquidity, valuation and potential pricing pressures during distressed periods, believes Mr Schulthess.

“Differentiation will depend less on product design, and more on the underlying infrastructure and plumbing, which enable wealth managers to implement and scale private market solutions efficiently.”

The underlying message of these comments is clear: administering private market investments remains a highly complex and resource-intensive task that few firms have mastered with any real scale or success.

Tech and talent

Most commentators agree that investment products are becoming increasingly commoditised. It is instead the service and technology built around them, combined with expertise of the advisers who construct and sell them, that is valued most. In this climate, low turnover of private bankers and investment experts is a particularly strong asset.

In this climate, low turnover of private bankers and investment experts is a particularly strong asset

“Private equity is no longer a differentiator. However, access and curating the opportunities intelligently definitely is,” says Sally Tennant, veteran private banker and founder of Acorn Capital Advisers in London. Those houses able to deploy AI to improve portfolio construction are even more likely to end up on the winning side.

“Every Tom, Dick and Harry is touting their expertise in private markets, around both credit and equity. The real differentiator between them will be who can arrange access to the deals,” suggests Sharmil Patwa, founder of wealth management consultancy Opus Una and former director at Barclays Wealth.

Moreover, digital assets and intellectual property (IP) — involving a plethora of patents across entertainment, medicine and biotechnology — await timely intervention from private banks.

But a financial health warning card also needs to be attached to these opportunities which wealth managers are keen to explore.

“Digital assets will increasingly become part of the array of products that private banks will need to offer,” suggests Shelby du Pasquier, head of the banking & finance group at Geneva law firm Lenz & Staehelin. “But the risk profile of those types of investments is higher than others and will result in significant losses for the unwary.”

Massive losses incurred in the recent collapse of First Brands serve as a timely reminder of these risks. “A Darwinian selection is likely to take place in the years to come between those banks that manage to offer to their clients consistently performing products, and those who do not,” says Mr du Pasquier.

It is important to stress the role of private banker as quality controller, sparring partner and sounding board. There is a danger that private markets investments become merely one more product, added to an existing, ever-expanding slate.

What client families value above any fancy investment strategies is service, dialogue and exchange of ideas. And that means engaging
with a human client adviser who can talk through all the investment options with them — be they private or public.