Turning a Corner: What’s in Store for Private Assets

Private assets have dominated much of the alternative asset management discourse as of late. Whether it is macroeconomic concerns such as rising interest rates and inflation shaping the role private assets play in portfolios, the evolving regulatory environment impacting their uptake, or opportunities for customisation and retailisation, private assets are undoubtedly front of mind.

The prospects for growth and innovation in these asset classes are undeniable. Yet concerns about liquidity and the fundraising environment still weigh on the minds of private assets fund managers. At the Maples Investment Funds Forum 2025, panellists discussed the near-term outlook for private assets from multiple perspectives: private credit; private equity; and opportunities in the middle market, to name a few. Over the course of the day-long event, some common themes emerged. Among them: retailisation, customisation, and the need for fund managers to adapt to evolving industry demands.

Private Equity

“Customisation is old hat and has been around for decades,” said one panellist in describing how developing structures and solutions for LPs has become commonplace. “They will come to the sponsor and ask for something specific: delivering returns, profiles…parameters designed specifically for their goals.”

What has been new in the private equity sector has been building platforms to take advantage of market opportunities that have arisen out of what the panellist called “the challenging macroeconomic environment.” Some have been “dipping their toes” into insurance, traditionally a resilient sector. Others have been focusing on the healthcare sector, which they viewed to be poised to gain momentum amid an aging population and the growing popularity of walk-in / urgent care facilities.

Panellists also noted much more interaction between sponsors and retail investors, which stands to become a key area of focus. This shift toward retailisation is also affecting customisation. Firms are developing new and specialised platforms to attract smaller-scale investors and assist with such functions as due diligence and term negotiation. “It’s become an area that is not one size fits all, both for the sponsor and for the investor.” Beyond serving clientele on both sides of the table, bespoke service is a selling point and offers firms competitive advantage.

Private Credit

If the numbers have it, private credit is hot: according to one panellist, assets in the class have now hit US$1.5 trillion and are projected to reach US$2.83 trillion by 2030. Yet for all of the headlines that private credit has garnered over the past few years, fund managers and investors are still pondering the role it plays in allocation strategies and what opportunities lie therein. What gained ground as a post-financial crisis solution has emerged into a mature market. “Years ago, when people thought about private credit, they thought about it as a sort of proxy for direct lending,” said one panellist. “But now, it’s the growth of several distinguishable sub-strategies” like structural and opportunistic funds, which in turn lend themselves to more specificity and customised goals.

This strategic diversification within private credit has given way to customisation, which also speaks to a wider clientele. Sovereign wealth funds have been “writing big checks” into private credit strategies, many of which have been evolved from an evergreen credit fund to something more tailored to a line of capital worth hundreds of millions of dollars.

At the same time, what a panellist called private credit’s “broadness” also allows for opportunities for smaller-scale managers, particularly in such niche areas as financing commodity purchases for end users. Retailisation of the asset class is also driving a need for platform customisation—as well as the potential for “trillions of dollars over the next 10 years.” One potential avenue into the retail market is partnership with banks and other traditional lenders to provide home financing and even in some cases, provide rehabilitative financing to sub-prime borrowers. Market experts also see opportunities emerging with secondaries transactions and litigation financing.

Middle Market Opportunities

Speaking of niche servicing, the middle market has been seeing a recent shift towards specialised managers in the hunt for returns and guidance that fits their market size and segment. “It’s been interesting to see these mid-market managers get more sophisticated over the past few years. Managers for this segment, historically constrained by resources, have been dabbling in strategies that have been often used by the bigger players. Middle-market fund managers have been shifting from traditional closed-end funds and “finding additional pockets of capital and seeking out what really works for them.”

Another trend in the middle market space of late is firms building out private credit functions alongside their private equity practices, which at least one panellist noted is bringing complexity—and competition—to the market.

Secondaries transactions, which have been a strong trend across the alternative asset management among larger managers, have been making their way to the middle market. Middle-market players have been calling for “creative secondaries tools” as part of their playbook.

Those managers that might not want to venture out of their comfort zone risk falling prey to another middle-market trend: “the divorce practice.” Frustration with performance and management has been driving a “pretty surprising uptick” in a changing of the guard – meaning openings for firms that have the capacity and a push towards innovation – or else.

Fundraising

Innovation aside, private asset funds need capital to maintain their strategies and keep afloat. Industry experts noted that various factors – interest rate hikes, inflation and geopolitical concerns among them – have resulted in a lacklustre capital raising environment in recent years. When is the inflection point coming? Most likely next year, panellists agreed. In the meantime, they noted, it’s an opportune time for fund managers to get their fundraising house in order.

As home to some of the world’s foremost pension plans, Europe is a wellspring of institutional capital for fund managers, offering deep opportunities for fund managers across the EU and European Economic Area. Being able to access this capital, however, requires knowledge of the regulatory environment. Fund structures such as the Irish Collective Asset Management Vehicle (“ICAV”) have proven useful for private fund managers in accessing European capital. Working with a third-party service provider such as a management company (“ManCo”) can allow for easy access, handing a range of functions including fund reporting, regulatory concerns, distribution, risk management and operational oversight. A ManCo can also allow for passporting funds across jurisdictions, helping private assets fund managers access capital across EU borders.

The shift towards retailisation of private assets is another potential source of capital, with industry experts seeing such a shift in the US regulatory climate. Firms that have the tools in place – or can customise – will be the best placed to service and take advantage of a burgeoning retail market.

The market winds are shifting for private assets, with opportunities to tap new clientele and capital likely soon to pick up. Being able to capitalise on these market openings, however, will require managers to embrace ingenuity and flexibility – staying with the same tried and tested private assets playbook might not garner the same returns they have seen historically. As one panellist noted about people working in the private assets space: “These are the smartest, most creative people in the world. If there is a solution to be had, they will find it.”

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