Why Smart Investors Are Flooding Private Markets in 2025—And What It Means for Your Portfolio

Private markets are stealing the spotlight as institutional players pivot from volatile public equities. Here’s the inside scoop on where the smart money’s headed—and why your FSA might still be stuck in 2010.

### The Quiet Exodus from Public Markets

While retail traders fight over meme stocks, whales are quietly dumping billions into private equity, venture capital, and pre-IPO deals. Liquidity? Overrated. Transparency? A nice-to-have. Returns? That’s the only language Wall Street still speaks fluently.

### The Crypto Angle: Parallel Playbooks

Crypto’s institutional adoption mirrors this shift—BNB whales and ETH stakers aren’t so different from private market vultures. Both hunt asymmetric returns while regulators scramble to define jurisdiction. ATH chasers and distressed-asset scavengers? Two sides of the same leveraged coin.

### The Punchline

When pension funds start behaving like VC bros and family offices outbid hedge funds for warehouse space, maybe—just maybe—it’s time to ask if ‘diversification’ now means ‘gambling everywhere at once.’

Brown Brothers Harriman (BBH) released its first Private Markets Investor Survey, which captures the ideas and opinions about private market investments from 500 institutional investors and wealth advisors from the United States, the United Kingdom, Germany, Switzerland, and Japan. The survey finds that the majority of investors (91%) plan to increase their holdings of alternatives within the next two years. This desire to increase is fueled by the fact that 94% feel they are under-exposed to private markets and “need to catch up.”

The research finds that the reason why private market investors buy alternatives is spread across several factors:

• 28% of investors believe that private markets outperform public markets and offer higher returns.
• Another 28% say they’re most motivated by a view that these products offer protection against inflation.
• 23% are driven to invest based on diversification and less volatility versus public markets.
• 21% primarily recognize the tax efficiency offered by these products.

“Although private asset strategies have seen exponential growth over the past decade, it’s clear that many LPs still believe they’re under-invested,” says . “The reasons differ among institutional and wealth types but one thing is for sure – both investor types are planning to accelerate their investments in this space.”

• Geopolitical volatility makes private markets more attractive: 78% respondents identified that geopolitical uncertainty increases their interest in alternatives.
• Liquidity takes center stage: The importance of liquidity and access to capital was highlighted by both investor types.

o    59% of all investors prefer products with a liquidity window of 4-6 years – markedly earlier than the timeline for returning investor capital in typical closed-ended commitment-based funds.

o    43% of investors (the highest figure) say they prioritize liquidity over target performance.

o    Both institutional and wealth investors noted that new products offering increased liquidity WOULD prompt them to increase their exposure to private markets.

• Delays in capital – A butterfly effect: 98% of investors who are already invested in private markets reported delays in having their invested capital returned. Most suggest it materially altered their investment decisions.
• LP education and availability: Among those who have not invested in private market alternatives as part of their portfolios, the main reasons include availability of products (63%), knowledge about the products (57%), and long lockup periods for capital (47%).
• New LP capital set to enter: The179 wealth advisors who do not currently have exposure to private markets plan to increase their exposure significantly (39%) or somewhat significantly (60%) over the next two years.
• ETFs rising: 34% of global investors plan to invest in an ETF with exposure to private market investments; 57% want to learn more about these products; and only 5% think it’s a bad idea.

The BBH Private Markets Investor Survey was conducted by Wakefield Research (www.wakefieldresearch.com) among 500 Institutional Investors and Wealth Advisors in the following markets: U.S., UK, Japan, Switzerland, and Germany, between March 28th and April 7th, 2025, using an email invitation and an online survey. All Institutional Investors were required to have private market investments as part of their portfolio. Of the 250 wealth advisors, 71 are invested in private markets and 179 are not, but plan to in the next two years.  Within each market, a 50/50 quota was set for Institutional Investors and Wealth Advisors.

Source: BBH