Over three quarters of private investors surveyed by Barclays said they expect to increase their allocations to private markets in the future. However, at the same time, Morningstar has issued a “liquidity crunch” warning within private markets following its own separate research.
Speaking to 554 investors with more than £5m in investable assets from June to August 2025, Barclays Private Bank and Wealth Management found that private investors use of private markets allocations is evolving. The vast majority (89%) are already actively participating in private markets investments and see them as an important part of shaping their overall investment strategy.
See also: Private markets education ‘paramount’ for retail investors
Further, 48% of respondents not currently investing in private markets said they were considering entering the space and over three quarters of all those surveyed expect to increase their allocations in the future.
Shenal Kakad, global head of private markets at Barclays Private Bank and Wealth Management, commented: “Private markets are no longer a niche and are becoming a more common component of high-net-worth investor strategies, and we are seeing that private investors are showing a growing level of sophistication in their approach to the asset class. They are scrutinising opportunities more closely, favouring established managers, and exploring structures that offer both performance potential and liquidity flexibility. This marks a clear shift from access to strategy.”
Private equity and real estate were reported as the most popular asset classes within private markets, but two in five are now actively considering private debt/credit (47%), venture capital (43%) and a third considering secondaries (33%) for future investments. The full report findings can be found here: Mind the gap: How private markets can align to the evolving needs of private investors
Private markets ‘face a liquidity crunch’
However, research from Morningstar said European private market firms are navigating a difficult landscape with a slowdown in fundraising and dealmaking in 2025. It also noted “subdued investor sentiment”, with private market firms disproportionately affected by tariff-related concerns, and delays returning capital returns to investors, which is impacting future fundraising cycles.
Johann Scholtz, senior equity analyst at Morningstar, notes: “Private market firms are caught between a rock and a hard place. They need to provide liquidity to their existing partners who are stuck in aging funds, but lackluster returns are making it tough to attract new retail money into semiliquid vehicles. This balancing act between managing exits and maintaining investor confidence is the core challenge for the industry right now.”
However, the report (European Asset Managers: 2025 Q4) also said the semiliquid funds are an increasingly vital tool as they offer partial liquidity without investors needing to wait the full life cycle of a closed-ended fund.
It also added that even though recent underperformance in private market funds narrowed the valuation gap with traditional asset managers, private market firms continue to command a premium, reflecting “their superior growth potential despite current challenges”.
See also: Investment Association names first ever head of private markets
