Since the early noughties, performance for private markets in general has been robust - beating listed stocks, but maybe that task is getting harder. In an article by Wellington Management in July last year (authors William Craig and Mark Watson), it observed that over the last 25 years, the Cambridge Associates US Private Equity Index had a pooled net return of 12.09 per cent, compared with annualised returns of 8.46 per cent and 9.38 per cent for the Russell 2000 and the S&P 500 indices, respectively.    

Wealth managers appear to be broadly upbeat about private equity and certain other parts of the private markets space. And in the hedge funds sector, as reported here, returns have had their best result since 2009, and it will be a challenge to stage an encore.

“Private equity remains resilient despite a challenging investment environment. While its performance since the 2021 peak has trailed public markets, long-term returns continue to be supported by earnings growth rather than multiple expansion,” , a Massachusetts firm, was asked if he thought client inflow into private markets had slowed, given delays to exits and indigestion pains. 

“There is a recognition that private investments are not replacing public investments but rather can complement them depending on the client’s circumstances, goals, and fact patterns,” he said. “Given that the cost structure and types of private investment are shifting, it seems that the 'democratisation’ of private investments is continuing. New fund structures (interval funds and evergreen funds, as examples) with lower minimums are gradually lowering barriers to entry.

“There is caution though. Just because someone qualifies for a private investment doesn’t mean that they should invest. Likewise, not every private investment is created equally,” Padula said.

Monish Verma, founding CEO, partner, said in its "Ten Convictions For 2026," published last week, that “commodities, particularly materials, are benefiting from AI and electrification trends, and gold from geopolitical fragmentation. Hedge funds and private equity can enhance portfolio diversification, and our currency preferences include an undervalued Japanese yen and a strengthening Chinese yuan.”

LGT Capital Partners drills into the details of alternative assets’ categories, saying that private credit, for example, has become a more mature area.

“Geographical, sector and strategy diversification are becoming increasingly important amid geopolitical fragmentation and shifting relative value across regions. European direct lending currently offers attractive risk-adjusted characteristics compared to the US, supported by lower leverage and stricter credit documentation. Flexibility across sub-strategies, including credit secondaries and specialty finance, remains key to navigating this evolving market,” the firm said. 

It likes property markets, but there is a somewhat cautious tone.

“Real estate fundamentals remain broadly supportive, with balanced supply and demand and a slowdown in new construction underpinning rental growth. At the same time, the sector is adjusting to structural changes in occupier demand, technology adoption and capital markets. Investors are increasingly focused on supply-constrained markets and assets with durable, improvable cash flows, while remaining selective across sectors such as residential, logistics, grocery-anchored retail and hospitality,” it said.

A hotspot is infrastructure – a term ranging from airports to power cables and AI data centres. 

“Infrastructure is positioned at the intersection of digitisation, electrification and demographic change. The rapid expansion of digital infrastructure, the energy transition and supply chain reconfiguration are driving significant capital needs across the sector. These trends are expanding the investable universe beyond traditional core assets and creating opportunities for more dynamic investment approaches, including value-add strategies and secondaries,” it said. 

Wrapping up its analysis, LGT noted that emerging market debt has potential as countries improve their public finances, and benefit from their currencies hardening against the dollar, and improved credibility on monetary policy.