Retailization of private markets in Europe

Retail investors across Europe are gaining broader access to private market asset class including private equity, private credit, infrastructure and real assets. This shift is being driven by regulatory evolution, product innovation and a distribution ecosystem that is increasingly equipped to support long-term investment solutions beyond public markets.

Luxembourg sits at the heart of this momentum. Its established fund platform and industrial-grade servicing ecosystem create the foundation to structure, launch and operate private market products designed for broader investor participation, while meeting rising expectations on governance, transparency and operational resilience.

Market momentum:

what is changing in Europe

Europe’s retailization trajectory is developing through a combination of investor demand and structural change. Investors are seeking new sources of diversification and return potential, while private markets are increasingly viewed as a strategic long-term allocation rather than a purely institutional asset class. In response, asset managers are adapting product formats to align with wealth and retail channels, including through semi-liquid and evergreen solutions that introduce greater flexibility while preserving the characteristics of private assets.

This evolution is not purely commercial. It also reflects the progression of the European framework for long-term investing, where retail participation is expanding in parallel with higher standards for investor protection, product governance and disclosure quality.

The scale of this shift is becoming measurable. Global alternatives AUM has reached $18 trillion, with private equity representing the single largest segment at 34%, followed by private credit at 11% and infrastructure at 8% (Preqin, Q3 2025). Looking further ahead, alternatives AUM is forecast to surpass $30 trillion by 2030, with private equity expected to outpace all other asset classes in growth over the next six years. Private assets as a whole now represent 4.6% of the $254 trillion global investing universe — up from 3.4% in 2020 — though still well below the 20%-plus allocation that institutional portfolios already maintain. This gap signals a meaningful runway for continued growth, especially as private market products become more accessible to broader wealth and retail channels.

Why Luxembourg matters

Luxembourg remains a preferred hub for structuring and scaling private market solutions aimed at European distribution. The jurisdiction offers a broad range of fund structuring options and a mature ecosystem capable of supporting complex investment strategies across private equity, private credit and real assets.

Beyond structuring, Luxembourg provides the operational infrastructure required to deliver these products at scale. Its network of administrators, depositaries and transfer agents supports the full lifecycle of retail-compatible private markets, including investor onboarding, recurring valuations, reporting cycles and controlled redemption processes. As the European market evolves, Luxembourg increasingly functions as both a domicile and an operating platform for private market retailization.

Data from Preqin confirms Luxembourg’s growing dominance. The jurisdiction now leads the domicile landscape for European-focused private capital, consistently increasing its share of aggregate capital raised across both European and globally-focused private capital funds over the past decade. Luxembourg is the largest single domicile by number of Europe-focused closed funds, having pulled significantly ahead of competitors including Ireland, Cayman Islands and Delaware. In private debt, Luxembourg has established an especially commanding position, accounting for a clear majority of aggregate capital raised for European-focused strategies (Preqin Pro, 2025). This trajectory reflects not just regulatory alignment but the jurisdiction’s reputation as an efficient, pragmatic and operationally mature hub – backed by a regulator, the CSSF, that the market views as both responsive and credible.

Product innovation and industry adoption

Retail-oriented private market solutions are evolving rapidly across the industry. Semi-liquid and evergreen structures are becoming more common, supported by feeder formats, blended solutions and portfolio approaches designed for broader investor profiles. This is expanding the relevance of private markets for private wealth and distribution partners seeking long-term investment opportunities with clearer access and governance features.

At the same time, digital enablement is accelerating the investor experience. Emerging platforms and distribution technologies are helping to reduce operational friction, improve servicing and make private markets easier to access, while also increasing the need for strong controls, consistent data and robust oversight across the operating model.

The market evidence for this shift is compelling. According to KPMG’s proprietary analysis of 115 sub-funds across 26 asset managers (representing $25 trillion in AUM), hybrid and evergreen funds in Luxembourg saw AUM rise from nearly €54 billion to €93.4 billion in under a year, a 73% increase (KPMG, December 2025). Monthly NAV has emerged as the most common approach among semi-liquid strategies, with 45% of funds choosing this frequency, reflecting the operational shift required to service continuous subscription and redemption cycles. The majority of these vehicles are structured as SICAVs (70%), with median management fees of 1.25% and median performance fees of 12.5%. Notably, 63% of these funds have minimum subscription requirements below €20,000, reflecting a deliberate push toward broader investor access. On the investor side, Preqin data shows that European wealth investors are increasingly seeking both open-ended and closed-end structures to access private markets, with liquidity concerns pushing many toward semi-liquid formats and evergreen solutions (Preqin and BlackRock European Private Wealth Survey, September 2025). Industry partnerships are accelerating this trend: BlackRock and Partners Group are building a joint evergreen platform targeting high-net-worth individuals with a $10 trillion private wealth opportunity in view, while KKR has invested in iCapital to broaden individual investor access to its private strategies.

Regulatory focus:

ELTIF 2.0 and the EU framework

The ELTIF 2.0 regime (Regulation (EU) 2023/606) provides a European framework that supports long-term investment strategies and enables participation from both institutional and retail investors. It introduces clear expectations around investor protections, diversification and risk management, as well as rules that facilitate distribution across the EU.

Luxembourg’s alignment with this framework, combined with its broader structuring capabilities and servicing depth, reinforces its position as a practical jurisdiction to support regulated access to private market strategies while maintaining strong investor protection standards.

The ELTIF market has grown substantially. As of the end of 2025, there are 252 ELTIF funds in the market, with Luxembourg domiciling 152 of them — a 60% share that reflects both its regulatory predictability and its execution capability (Preqin Pro, 2025). KPMG analysis puts this figure even higher, with 68% of ELTIFs now domiciled in Luxembourg (KPMG, December 2025). Since ELTIF 2.0 came into effect in January 2024, the structure of new launches has shifted meaningfully: open-ended and quarterly-liquidity formats have surged, with quarterly-liquidity funds rising from 9% of launches pre-ELTIF 2.0 to 31% thereafter, while closed-end launches have fallen from 84% to 62% of the total (Preqin Pro, 2025). This structural shift has expanded retail access, particularly driven by Italian and US General Partners (GPs) who now offer the highest proportion of retail-eligible share classes. From a strategy perspective, private debt leads the ELTIF universe at 35%, followed by private equity at 29%, infrastructure at 13% and real estate at 15%. Infrastructure in particular stands out as the top growth priority among European wealth investors looking to increase allocations in 2026. Encouragingly, almost half of European wealth investors are considering investing in an ELTIF within the next three years (Preqin and BlackRock European Private Wealth Survey, September 2025), while 16% are already invested. Investors cite greater fee transparency, improved liquidity certainty and reduced regulatory complexity as the areas where ELTIFs could be further enhanced.

Comparative overview:

retail fund regimes in Luxembourg

Luxembourg offers a versatile array of fund structuring options tailored to the private wealth segment and semi-retail investor base. The choice of vehicle largely depends on the specific profile of the target investor and how far into the retail spectrum the fund sponsor intends to go. This strategic decision influences not only the regulatory framework but also the marketing reach and operational flexibility of the fund.

Among the most widely used vehicles are the RAIF, the Part II UCIs, and the European Long-Term Investment Fund (ELTIFs). Of these, the Part II UCI regime has emerged as the dominant structure for products with a “retail-like” orientation. Notably, it can be paired with an ELTIF wrapper to unlock the benefits of the EU-wide marketing passport to retail investors, offering both regulatory robustness and distribution efficiency.

Here’s a high-level summary of the key regulatory characteristics and marketability features across the main retail fund regimes.

Looking ahead

Luxembourg’s role in Europe’s retail private markets evolution is expected to strengthen as EU frameworks continue to mature and investor preferences diversify across strategies and formats. Progress will depend on the industry’s ability to combine product innovation with disciplined governance and operational readiness. If done well, retailization can expand access to private market opportunities while maintaining the transparency, oversight and protection principles that underpin sustainable investor outcomes.

Several indicators point to continued momentum. KPMG projects that UCI Part II alternatives under administration in Luxembourg — covering both ELTIF and non-ELTIF structures — will double by 2028, reaching €200 billion, driven by a 20–25% CAGR over the next three years (KPMG, December 2025). CSSF data shows that active UCI Part II funds already stood at 301 in 2025, up from a low of 230 in 2021, confirming the structural upswing. Preqin forecasts that private credit AUM growth will accelerate over 2026, with retail investors and semi-liquid structures providing an important tailwind, while the Preqin and BlackRock Private Wealth Survey indicates that European wealth investors broadly expect to maintain or increase their capital allocations to both infrastructure and private credit over the coming 12 months.

Operational readiness will be decisive. As KPMG’s research highlights, servicing evergreen and hybrid funds requires capabilities that span governance, continuous valuation, liquidity management and third-party coordination — an industrialized operating model in which scale, and increasingly AI-enabled tooling, are becoming critical differentiators. Luxembourg’s established ecosystem, concentration of institutional-grade service providers and regulatory clarity position it well to support the next phase of this evolution.