Private market strategies seek core portfolio status

On the 8.15am flight from London Heathrow to Nice in early February there is not a single spare seat. Nearly every passenger is deeply engrossed in either onscreen or paper presentations, featuring bar charts and line graphs.

The morning in-flight conversations are far from perfunctory. They feature a deep dive into liquidity, structures, investment themes and double-digit returns. Every fund these bankers discuss invests in private markets.

All of these besuited travellers have the same final destination, the IPEM Wealth 2026 summit in Cannes, held in the Palais des Festivals on the seaside city’s Mediterranean waterfront, visited this year by 4,000 delegates.

According to wealth advisers, investment platforms and families attending the event, private markets are now a core part of their portfolio.

“Back in the day, we all allocated 60:40 portfolios [equities to bonds], which then shifted to suggesting 55:35:10, as clients became interested in alternatives and they became available,” says Annabel Spring, CEO of Allfunds, in town to meet clients and partners and take the temperature of industry sentiment.

“Now we are back to 60:40, but private credit forms a fundamental part of the 40, with private equity and VC now a significant part of the 60,” says Spring, whose previous role was CEO of global private banking and wealth management at HSBC.

Allfunds’ assets under administration in private markets almost doubled during 2025 to €30.8bn, overseen by nearly 400 wealth managers out of 900 on Spring’s platform, with a “strong pipeline” for 2026.

The problem for Europe is that private banks are “at an earlier stage of adoption of the asset class from Asia and the UAE”, she says politely, although appetite and adoption are growing at pace.

Another leading wealth manager bemoans the lack of understanding among EU governments about the role of private equity in their economies and its place in investment portfolios, despite heavy promotion of the concept.

“I have met a number of EU government ministers and asked them how many have invested in private equity, and the answer was that none of them have,” says the investment specialist, who has worked for Europe’s leading private banks. “There is a real risk that they don’t understand what they are foisting on people and what the end result for pensions would be. And I’m not sure there is going to be a massive economic effect either.”

Pretty green

The tool that most distributors and wealth advisers hope will sway this equation in their favour is the “evergreen fund”, fast gaining popularity against the traditional closed-ended vehicle, and the current focus of most discussions at the Cannes symposium.

Partners Group is believed to have constructed the first evergreen fund, a perpetual vehicle, with an indefinite lifespan rather than a fixed term — offering greater liquidity than traditional closed-end funds — in 2001.

But it has taken more than two decades for this pioneering structure to become fashionable, with a spate of recent launches. “The main benefit of these structures is convenience,” according to Mathieu Forcioli, global and Asia-Pacific head of alternatives, wealth and premier solutions at HSBC, speaking on a panel in Cannes, moderated by PWM.

“We have always struggled for clients to put alternatives in their portfolio, because of the complexity,” says Forcioli, one of the main promoters of these products, having launched a raft of them at HSBC in 2023.

While this mass launch may have proved “controversial” a few years ago, “it’s not so controversial anymore”, he says, praising asset managers for educating private bankers about the inner workings of their strategies. “They are certainly going to become the core of clients’ portfolios.”

Wealth managers have started with “a new concept that was really quite niche, taken it and developed it into something now completely mainstream”, argues Tarun Nagpal, founder and CEO of S64, where he has launched more than 50 regulated private‑markets evergreen funds across Emea and Apac for the likes of Vista, Hg, Bridgepoint and Macquarie.

He talks about a “fundamental shift” towards regulated instruments now managed predominantly for a wealthy clientele, rather than for institutions.

For this, he says, “you need new portfolio managers, you need new types of internal resourcing and legal compliance”, with a typical private bank requiring 100 to 150 expert staff to oversee the launch and maintenance of an evergreen product suite.

The “proof of the pudding in terms of returns” is beginning to come through, against the backdrop of a benign market with a huge variety of sector-specific managers bringing new products to distributors.

“The range and depth of these products have exploded,” he says, with private bankers’ roles becoming more critical in “separating the wood from the trees”, in a sphere where advisers and their clients are seeking an annual return of between 15 and 20 per cent.

As a veteran of Deutsche Bank, where he was running a $15bn hedge fund business at the time of the 2008 financial crisis, Nagpal does however see a parallel journey of today’s private markets structures to the alternatives of yesteryear, moving from less to more liquid funds.

“Those risks today are there, not just in private markets but in hedge funds and liquid Ucits products that have gating risks in them. The issue is that a lot of private markets GPs [general partners] have never been to retail, and have not experienced the very severe, long-lasting pain that can occur when your brand gets tarnished in the retail market because of gating.”

Liquidity concerns

This major issue could reoccur at any time he believes. “Will there be blow-ups in the private markets evergreens…absolutely, there will be. Will there be funds that will shut down? Yes. Will there be gating? Yes. Will there be lots of news stories? Yes, 100 per cent. However, what I think is very different to the hedge fund trajectory is that I actually don’t think, that from a macro perspective, this trend is going away at all.”

The fundamental reason for this is that private markets now cover vast swathes of the global economy, with particular focus on today’s key thematics for investors: energy transition, digital infrastructure, healthcare, data and AI.

“It’s just such a massive component of your general exposure to the world and growing economy, that it has to be in clients’ portfolios,” says Nagpal.

There are two major challenges to the current boom, say industry invoices. These are liquidity concerns and lack of products knowledge among advisers.

Monthly valuations, although resource intensive, are key for clients to have faith in this new order of funds. “There is a lot of excitement, which is great, but with excitement comes exuberance,” warns Forcioli at HSBC. “You can be the best private markets manager in the world, but if you don’t know how to measure liquidity, you are going to have problems.”

He tells advisers at his bank not to get carried away: “Don’t chase every dollar. Not every dollar in these structures is the right dollar. It has to be sticky and clients have to understand what the reason is for investing in private markets.”

Emotional investments

One of the major players present at Cannes is leading French private equity house Ardian, managing €196bn, spun out of Axa by Dominique Senequier in 2013. “Dominique is exceptional, still going strong in her 70s, she is private equity royalty in France,” says a senior investment manager in Paris, who knows the firm well. “She is responsible for pure democratisation of private assets at its best.”

Private wealth is making up an increasing proportion of Ardian’s investor base, accounting for 14 per cent in its fundraising commitments last year. During 2025, the firm launched three new private wealth funds and continues to roll out its Ardian Access series.

The vision involves offering professional private investors access to the same deals as the world’s largest institutions.  

“It’s true, evergreen funds are not the easiest fund to understand,” admits Erwan Paugam, head of the private wealth division at Ardian since the unit’s launch in 2020. “But private bankers have been dealing with very complex funds in the past — hedge funds, structured products, even the simplest products like equity funds and ETFs are not that easy to understand, you need know the nuances,” says Paugam, himself a former private banker at JPMorgan.

As well as specialising in secondaries, giving wealthy investors access to private equity over a shorter time horizon, Ardian encourages co-investors to buy into major projects as part of its $20bn infrastructure portfolio, including its recent acquisition of a controlling stake in London’s Heathrow airport.

“The third runway is a very important value creation driver for us and there are a lot of things we can do to make the airport more efficient,” says Paugam.

“We call it the gateway to Europe, as it’s a very important asset for the whole continent, and a hub where a lot of the traffic is going through. It’s also the most advanced European airport when it comes to energy efficiency.”

Ardian sees three major underlying trends in private markets: energy, digital networks and transportation. “The reality is there are huge investment needs in those areas,” says Paugam. “We are talking about several trillion dollars that need to be invested to keep our continent up to pace with the rest of the economic objectives of Europe. On the energy side in Europe, it’s even more of an urgent matter, because we are not just talking about European energy transition but also about energy sovereignty. That is very important in terms of the role we have to play as private investors.”

The stories behind these trends are key to private clients. Energy is very attractive for private investors, with their interest fuelled particularly by geopolitics. “The key change in our industry is that private markets have become very emotional,” says Paugam. “You need to be able to speak about things that are really important for private individuals. Everybody lives and breathes infrastructure.”

Paugam likes to talk about family business owners he meets, who know more about private equity than industry leaders. “Some private wealth investors are even more sophisticated than institutions,” he suggests, with several cross-border families becoming successful private equity investors in their own right.

“If you go back to the 1980s, private equity was a private club and you could kind of make arrangements with your friends around the dinner table,” says the head of investments at a major multi-family office in London. “Now, of course, you need a vastly expensive team and you need to be working for 10 or 20 years to get the right access to deals. So one of the key things we had to do was to hire super expensive people.”

Return dispersion

At Moonfare, a pioneering private equity platform allowing retail and high net worth clients to invest directly in funds previously only open to leading institutions, chief economist Mike O’Sullivan speaks carefully about attracting clients who understand the landscape.

His 20-strong investment team has done much research on dispersion of returns. They found that over the last two decades, the top quartile of private equity funds averaged 22 per cent per annum, which he describes as “phenomenal”.

However, the bottom quartile has averaged less than 6 per cent. “The worry would be that the man and woman in the street is given the processed food rather than the luxury items,” says O’Sullivan, a popular figure at the Cannes summit. “So you get returns that are the same as the FTSE index, but without the liquidity.”

He flags up a series of “unseen barriers” to the “mass diffusion” of these strategies.

“Even within small to medium-size private banks, if you look at your average RM [relationship manager], their main expertise is their relationship and knowing the client. They do lots of banal but meaningful things for the client, and bottom of the list is that they know about private equity. Many of them don’t know how to sell it and that’s quite a big barrier. And that’s why quite a lot of the big companies who are here in Cannes are trying to package these things in slightly more dumbed down ways. I think it’s a big issue.”

Private bankers, he says, are incentivised to “sell really risky stuff, and they do it, because that is what brings in the bonus at the end of the year. That is a problem,” as it can take 10 to 15 years to really educate a private banker of the highest calibre. “For something as complex as this, you definitely need the human touch.”

This caution is backed by a strikingly realist sentiment among some recruiters. “Most banks don’t care either way about advisers’ product knowledge,” says a prominent recruitment consultant, visiting Cannes to meet mid-career relationship managers looking for a move.

“It’s their relationships and books of business they are bothered about. As long as they can bring in lots of assets, private banks will be recruiting them.”