Private Markets Alert Newsletter

✍️ Op-Ed: The Maturation of Modern Private Markets

The private markets landscape is experiencing a fundamental transformation that extends far beyond typical market cycles. This week's developments reveal an ecosystem evolving from niche alternative allocations into core portfolio components, while simultaneously facing heightened regulatory scrutiny and market structure questions that will define the industry's trajectory for years to come.

Three intersecting themes dominate the current environment. First, the democratization of private markets access continues to accelerate, with regulatory frameworks in the US, UK, and EU actively working to open these investments to mainstream retail investors. The stakes are enormous—the US 401(k) system alone represents over $9 trillion in assets, currently allocated almost entirely to public markets. Second, artificial intelligence is not merely another investment theme but rather a structural force reshaping where value creation occurs, with roughly 95% of software companies remaining private and innovation increasingly happening outside public view. Third, regulators are stepping up efforts to understand interconnections and systemic risks, exemplified by the Bank of England's groundbreaking stress test of the £8.23 trillion private equity and credit market.

What makes this moment distinctive is the convergence of opportunity and caution. Private equity continues to deliver superior returns, with institutional investors reporting median 10-year annualized returns of 13.5% that consistently outperform public equities, real estate, and fixed income. Yet private credit markets are showing warning signs, with the sector increasingly resembling public debt markets as rapid growth blurs traditional distinctions and competition pressures underwriting standards.

The path forward requires balancing competing imperatives. Expanding access to private markets could enhance portfolio diversification and returns for millions of retirement savers, but only if products are designed for daily-priced vehicles, properly valued, and thoroughly understood by fiduciaries and participants alike. AI-driven innovation presents compelling opportunities, but the next wave of value creation remains in its formative stages, concentrated in private markets where manager selection and access are paramount. Regulatory oversight is essential to maintain financial stability, yet must avoid stifling innovation or creating barriers that inadvertently concentrate market power among the largest players.

For allocators, the imperative is clear: understand these structural shifts, position portfolios to capture opportunities while managing risks, and recognize that the most significant changes to private markets in a generation are unfolding in real time.

🤝 Top Deals & Market Activity

GP Stakes Secondary Market Seeks Sustainable Exit Solutions

The GP stakes market recorded significant deal activity in 2025, with global transactions reaching $3.4 billion—the highest level since 2021's record $7.9 billion. Major deals included minority stake sales by Ardian, Mubadala's investment arm, General Catalyst, and Accel-KKR. Goldman Sachs-backed Petershill Partners sold its stake in Industry Ventures to Goldman's balance sheet for $236.6 million as part of its delisting strategy. The persistent challenge of GP stakes exit liquidity has prompted exploration of evergreen fund structures as potential solutions. The semi-liquid evergreen universe crossed $427 billion in AUM in Q2 2025 and is projected to surpass $1 trillion within five years. However, Petershill's delisting from the London Stock Exchange after persistent undervaluation demonstrates that public markets may not provide the liquidity premium GP stakes investors seek. Industry participants are increasingly viewing evergreen structures—which generate steady management fee income and benefit from long holding periods—as natural fits for these perpetual, cash-generative assets.

Infrastructure and Real Assets Draw Renewed Capital Commitments

Infrastructure is attracting unprecedented investor interest, with 46% of surveyed LPs planning to increase allocations over the next 12 months—the highest among all alternative asset classes. Global trade reached nearly $33 trillion in 2024, spurring major investments in ports, rail, and logistics infrastructure. The energy transition continues to drive capital deployment, with estimates suggesting approximately $6.5 trillion per year in new clean energy infrastructure investments needed by 2050. Core infrastructure is at a critical inflection point, with capital expenditure set to materially outpace depreciation for the first time this century. AI-driven data center buildout is creating new categories of infrastructure investment, with some estimates suggesting the global data center and related infrastructure opportunity could reach $5-7 trillion. Power availability has emerged as a central factor in site selection decisions, transforming traditionally stable infrastructure investing into a dynamic growth opportunity.

Tokenized Asset Pilot Demonstrates Private Credit Innovation

SemiLiquid launched its Programmable Credit Protocol at Abu Dhabi Finance Week, following a successful pilot with Franklin Templeton, Zodia Custody, Avalanche, and CMS. The protocol enables institutions to activate credit against digital and tokenized assets held in custody without transferring collateral. Franklin Templeton's BENJI tokenized money-market fund served as collateral in the pilot, remaining encumbered throughout the loan lifecycle under pre-agreed terms and automated triggers. This allows institutions to retain full daily yield while granting lenders enforceable security over assets, eliminating counterparty risk without collateral movement. While tokenized assets are projected to reach $10 trillion by 2030, over 70% of institutional bilateral financing still involves bespoke paperwork and collateral transfers across fragmented systems. The protocol advances to Phase II in early 2026, expanding integrations across additional custodians, collateral types, and jurisdictions, with future capabilities including under-collateralized lending supported by verified solvency attestations.

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