Institutional Investors Plan to Boost Private Market Allocations Amid Under-Exposure Concerns

Brown Brothers Harriman''s inaugural Private Markets Investor Survey reveals a striking consensus among 500 institutional investors and wealth advisors across the U.S., U.K., Germany, Switzerland, and Japan. Nearly all respondents (91%) intend to increase alternative asset holdings within two years, with 94% citing under-exposure to private markets as their primary motivation.

The drivers behind this shift are multifaceted. Twenty-eight percent of investors view private markets as superior to public equities for returns, while an equal proportion prioritize inflation hedging. Diversification benefits attract 23%, and 21% emphasize tax efficiency. "Even after a decade of growth, limited partners still perceive a gap in their portfolios," notes BBH''s report. "The rationale varies, but the direction is unanimous—capital is flowing inward."

Geopolitical turbulence amplifies the appeal, with 78% of respondents favoring private assets during market disruptions. This sentiment crosses borders, though allocation strategies differ by region and investor type. Family offices chase yield, pension funds seek stability, and sovereign wealth funds diversify beyond traditional asset classes.