Sentiment towards private assets has slid for UK investors, with just 40% of UK adults happy for pensions to include investments in private markets, versus 53% a year ago, according to recent Aberdeen research.
This support does vary by age, with 50% of those aged 18-34 open for their pensions to include private assets versus just 31% for those aged 55 and up.
Despite this falling support, a diversified basket of private assets has significantly outperformed traditional assets, but it has done so with a much higher risk profile, Aberdeen found.
Data from MSCI showed over the past 25 years, private assets have delivered a total return of 845%, compared to a 309% total return from the traditional 60/40 portfolio (data as of 30 September 2025).
Nalaka De Silva, head of private markets solutions at Aberdeen Investments, said: “The long-term nature of private market investments, even versus publicly listed shares or bonds, should mean investors can demand a higher level of return over the very long term.”
That said, De Silva noted the risks entailed by private markets are very different and each sub-segment has its own dynamics. For example, they drew attention to the current concerns around private credit which are “clearly warranted, but remain focussed on a few direct lending areas”.
See also: Morningstar: Private credit flows yet to show signs of trouble
“These troubled pockets are small compared to the wide range of high-quality strategies available,” De Silva said.
Boosting public confidence in private markets will demand addressing several significant barriers, including the lack of daily dealing, inconsistencies in how fees are reported, low transparency on valuations and a lack of reliable benchmarking.
De Silva said: “If the government wants the asset class to play a stronger role in supporting pensions and better retirement outcomes, education is one of the most powerful levers it can pull.”
To encourage this, Aberdeen suggested a more “open and honest conversation” about risk and reward to ensure investors are going into private markets with their eyes wide open.
Additionally, there should be a “product neutral approach” and understanding that some investment vehicles are better suited for some people than others. For example, they pointed to investment trusts which are currently excluded from the government’s Pensions Schemes Bill, which aims to encourage more investment in private capital.
See also: View from the top with Schroders Capital’s Lowe: Private markets conversations are deepening
