The democratisation of private markets

Opportunities once largely reserved for institutional and ultra-high-net-worth investors are becoming accessible to a broader investor base.

Our Private no more: The democratisation of private markets global report explores what this shift means for asset and wealth managers, and the operating, distribution and investment decisions that could define the next phase of growth.

This report draws on two complementary bodies of evidence. The first is KPMG US’ direct experience advising leading US alternative asset managers and wealth platforms through this journey. The second is a global survey of 100 fund managers and distributors across the Americas, EMEA and Asia Pacific, supported by insights from KPMG’s extensive global network of wealth and asset management leaders.

Zeynep Meric-Smith

Partner, Wealth and Asset Management Consulting

KPMG in the UK

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Private no more: The democratisation of private markets

The report explores one of the most significant shifts facing the asset management industry.

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EMEA is gathering momentum

Across EMEA, the direction of travel is clear, although firms are moving at different speeds. 53% of EMEA organisations surveyed already offer multiple evergreen products at scale, while 18% are offering 1-2 products/selectively expanding, 18% are piloting/preparing first launch and 12% are evaluating their approach/not yet committed.

Wealth is leading the way

Broader access does not yet mean mass-market adoption. In EMEA, 59% of organisations surveyed identify family offices as a primary target segment and 56% target high-net-worth investors. Just 12% identify mass-affluent or mass-retail investors as a primary target.

The findings suggest that the immediate opportunity remains firmly centred on advised wealth and higher-net-worth investors.

A more measured outlook for private credit

The regional picture also differs by asset class. While 65% of respondents globally report a positive outlook for private credit over the next year, that falls to 44% in EMEA. In EMEA, 26% are neutral and 29% report a negative outlook.

The findings highlight the importance of looking beyond global momentum and understanding where individual markets and asset classes are moving at different speeds.

Building for scale

Democratisation is about more than launching new products. Globally, 52% of respondents identify liquidity design and redemption management as a top barrier to launching or scaling evergreen products, while 41% believe the market underestimates the cost and operational burden of servicing a larger investor base.

For firms looking to capture the opportunity, product design needs to be supported by the right distribution, operating model, technology, governance and investor experience.

Five lessons from the leaders

KPMG's research identifies five themes among organisations that describe themselves as ahead of their peers on execution maturity:

Get the fundamentals right

Build strong governance, leadership alignment and technology and data infrastructure required to support transparency and reporting.
Prioritise investor education

Help investors and intermediaries understand liquidity, risk and appropriate investment horizons.
Build flexible operating models

Combine internal capabilities with external partners to create an operating model that can adapt as the market evolves.
Find scale through partnerships

Use distribution and technology partnerships to extend reach and capabilities.
Recalibrate valuation capabilities

Prepare for the increased valuation frequency, data requirements and processes associated with evergreen structures.

Democratisation should be viewed as an operating-model transformation, not simply a product launch.

Explore the next phase of private markets

As access to private markets broadens, UK and EMEA firms have an opportunity to define where they want to play and build the capabilities needed to succeed.

Read Private no more: The democratisation of private markets for the full findings, lessons from more developed markets and practical considerations for asset and wealth managers.