Private markets is not retreating but the rules are changing

Global investors are not walking away from private markets. But they are being more deliberate about who they back to manage their money there.

That is the central message from the 44th edition of the Coller Capital Global Private Capital Barometer, which surveyed 108 limited partners from around the world, collectively overseeing more than $2 trillion in assets.

The headline finding is striking in its clarity: 90% of surveyed LPs expect to either maintain or accelerate their pace of private markets commitments over the next two years. A third are actively planning to speed up. At the same time, nearly a quarter are trimming the number of GP relationships in their portfolios, a meaningful shift from the 16% who said the same when Coller last asked the question in 2020.

Private markets is not losing its appeal. The bar to get in, and stay in, is simply rising.

Geopolitics enters the allocation room

The survey finds that geopolitics has moved from background noise to a genuine factor in how LPs make private markets decisions. Just over a third of all respondents say geopolitical conditions are influencing their allocations more than before. In Asia-Pacific and Europe, that rises to nearly half.

Peter Kim, Partner and Head of APAC at Coller Capital, says the regional picture is distinct from the global trend.

“This Barometer makes clear that Asia-Pacific investors are navigating a different set of considerations to their peers elsewhere,” Kim said. “Geopolitics is weighing more heavily on allocation decisions here than in North America, and APAC investors continue to show strong appetite for secondaries as a way to actively manage their portfolios. It’s a reminder that the LP base is not monolithic, and that regional perspectives are becoming an increasingly important part of how private markets evolve.”

Interestingly, while global LPs are tightening their GP rosters, Asian LPs buck the trend sharply: 53% expect to increase the number of GP relationships they maintain, suggesting a market still in an expansion phase compared to more mature LP bases elsewhere.

The zombie fund problem is not going away

Advisers and allocators working through private equity portfolios should note a concerning signal in the data: 54% of surveyed LPs expect the number of zombie funds in their portfolios to grow over the next two years. A further 31% expect no change. Just 15% expect a reduction.

When zombie funds do appear, LPs are taking a pragmatic approach rather than a confrontational one. Management fee step-downs are the most popular response (54%), followed by incentive resets designed to encourage timely exits (18%). Manager removal is the preference of just 11%.

For advisers whose clients have private equity exposure, this is the practical takeaway: the sector is in a period of portfolio housekeeping, and active LP engagement with GPs on fund management and liquidity is increasingly the norm.

Secondaries are structural, not cyclical

What stands out most from this edition is how firmly continuation vehicles and the broader secondary market have established themselves as permanent features of private markets, not just a workaround for a difficult exit environment.

Jeremy Coller, Chief Investment Officer and Managing Partner of Coller Capital, recent high profile public market moves have put the exit window back at the centre of the conversation. This is encouraging, but it would be wrong to see IPOs and secondaries as competing routes to liquidity.

“The Barometer makes it clear that they are complementary. Secondaries have become a core route to liquidity and a central part of how LPs allocate, rebalance portfolios and retain exposure to assets they continue to have conviction in.

Two-fifths of LPs in this Barometer expect continuation vehicle activity to keep growing even as traditional exits recover, which tells you something about how structural this shift to secondaries has become.”

The data supports this: 40% of LPs expect continuation vehicle activity to keep increasing even if traditional exit channels open up, while 29% expect volumes to remain steady at current levels.

GP-led secondary volume reached approximately $106 billion in 2025, a record, even as broader exit activity stayed constrained.

Private credit: growth slows, but credit secondaries accelerate

On private credit, the boom is entering a more selective phase. The proportion of LPs planning to increase their target allocation to private credit over the next 12 months has dropped sharply, from 42% in the previous Barometer to 29% in this edition.

That does not mean the asset class is falling out of favour. It means the easy growth phase is over and quality is becoming the differentiator. Consistent with that, 53% of LPs believe risks in private credit are isolated rather than systemic, and just 18% see a systemic problem.

The more interesting development is in private credit secondaries.

Globally, LPs rank private credit as the asset class most likely to see the greatest proportional growth in secondary market activity over the next three years, ahead of private equity, infrastructure and venture.

The signs point to a maturing market: investors want more active tools to manage credit exposure, rebalance portfolios and capture relative value in seasoned assets.

AI: efficiency first, alpha second

On artificial intelligence, LPs are clear-eyed. Seventy per cent expect GPs to deploy AI primarily as a cost-efficiency tool over the next five years, rather than as a direct driver of investment outperformance. Just 22% see it as a source of return alpha.

Even so, 67% of LPs believe AI adoption will widen the gap between leading and lagging managers rather than level the playing field. For advisers thinking about manager selection, that is a meaningful signal: AI competency may become a differentiating factor in GP performance over the medium term.

One human element remains firmly in place. Among LPs making fund and co-investment decisions, 61% report no change in the importance of gut instinct, and 22% say it has become more important.

What this means for advisers

Private markets are not retreating. Allocations are holding and, in many cases, growing. But the investor base is becoming more disciplined and the standards are rising.

LPs are concentrating capital with fewer, higher-conviction GPs. They are paying closer attention to exit discipline, fund lifecycle management and liquidity pathways. They are embracing secondaries as a portfolio management tool, not just a last resort.

The message for financial advisers is straightforward. The clients sitting across the table from you are increasingly exposed to an asset class that is maturing fast. Conversations about GP quality, fund terms, liquidity mechanisms and the role of secondaries in portfolio construction are no longer institutional talking points. They are client review essentials.

Private markets are not getting simpler. The advisers who understand that earliest will be the ones best placed to add value when it matters most.