Private markets are set for broader adoption over the next three years, with 69% of asset managers and distributors expecting significant expansion as demand from wealthy investors increases, according to a new report by KPMG International.
The report, Private no more: The democratization of private markets, found that 53% of fund managers already offer multiple evergreen products at scale, reflecting growing efforts to expand private market access beyond traditional institutional investors.
High-net-worth individuals remain the primary target market, with 73% of surveyed organisations focusing on this segment, compared with 33% targeting mass-affluent or retail investors. The findings are based on a survey of 100 fund managers and distributors across the Americas, Asia Pacific and EMEA.
However, regional differences remain significant. Just 12% of EMEA respondents are targeting evergreen products at mass-affluent investors, compared with 42% in the Americas and 45% in Asia Pacific.
Liquidity management remains a major obstacle to expansion, with 52% of respondents identifying liquidity design and redemption management as key barriers to launching or scaling evergreen funds. Only 40% of fund managers believe intermediaries have a strong understanding of liquidity management tools during periods of elevated redemptions, while approximately one-third of distributors believe their clients understand these mechanisms.
Operational challenges are also slowing adoption. Approximately 48% of respondents said implementation had taken longer than anticipated, while 41% believe the industry underestimates the costs and operational demands associated with servicing a larger investor base.
Private equity and private credit are the most widely offered or planned asset classes, each cited by 62% of respondents. Despite concerns over underwriting standards and asset valuations, 65% expressed a positive outlook for private credit over the next year, although one-third of EMEA respondents reported a negative outlook for 2027.
Meanwhile, 74% of respondents said private credit underwriting standards had tightened over the past three years, as managers face increased competition for assets and potential pressure on returns.
The US remains the most developed market for wealth-accessible private market products, with retail alternative assets under management projected to increase from $1.9tn in 2022 to $6.9tn by 2030.
In the UK, KPMG identified long-term asset funds as a potential driver of broader private market participation, although technological and distribution challenges could constrain uptake.
Naveen Sharma, head of private capital and asset management at KPMG UK, said the UK market would follow a different trajectory from the US, shaped by its regulatory framework and investor demand. He highlighted the need for investment platforms to accommodate longer redemption notice periods and non-daily dealing arrangements.
David Neuenhaus, global sector head of private capital and asset management at KPMG International, said firms would need to align their distribution strategies, technology and operations to capitalise on expanding demand, rather than treating private markets growth solely as a product development opportunity.
