Private markets outlook Q4 2025: Five takeaways for wealth investors

Private markets continue to offer resilience and diversification as investors look to navigate an uncertain global landscape.

As we head into the final months of 2025, investors find themselves in a world that feels strangely calm – yet also unsettled.

Inflation has eased, growth has proven more durable than expected, and central banks are signalling greater policy flexibility. But the apparent stability masks underlying fragilities related to ongoing tariff uncertainty and impacts, potential reinflationary dynamics, growing fiscal sustainability concerns, and ongoing geopolitical realignments and tensions that are reshaping trade, technology and capital flows.

Even the current wave of valuation euphoria, especially surrounding areas such as artificial intelligence, can be added to the list of risks on the horizon, given the historical pattern of boom-and-bust cycles following major technological breakthroughs.?

In this shifting landscape, private markets can demonstrate their enduring value. The long-term orientation, de-correlation to public assets and ability to capture idiosyncratic opportunities continue to make them a vital component of diversified portfolios.

The following five takeaways outline how wealth investors can think about private markets as we head into 2026 – focusing on resilience, selectivity and the ability to generate value through active ownership and long-term perspective.

1. Markets appear benign, but risks are forming
Global markets have enjoyed a period of relative calm – and even localised exuberance – supported by resilient consumption, moderating inflation and the prospect of selective rate cuts. Yet beneath the surface, fault lines are emerging.

For investors, a mix of slowing momentum and policy divergence creates a challenging landscape. Meanwhile, valuations in public equities markets have rebounded strongly and appear stretched in many areas, while bond market sentiment is fragile.

Against this backdrop, maintaining flexibility, focusing on quality assets and resilience, and extending investment horizons are all essential.

2. Private markets offer insulation and diversification
In this context, private markets can demonstrate their role as a stabilising force within portfolios. Their intrinsic characteristics – long-term focus, limited mark-to-market volatility and concentration on fundamental value drivers, and alignment between managers and investors – offer insulation from short-term sentiment swings.

More importantly, private asset classes provide access to differentiated sources of risk and return. Private equity and infrastructure exposure can capture value from the digital transition and energy transformation, as well as access domestic growth opportunities that remain underrepresented in public markets. Private credit and real estate offer additional layers of diversification, particularly as investors seek income opportunities and tangible cash-flow resilience.

Moreover, private markets are benefiting from cyclical drivers stemming from lower transaction activity and subdued fundraising over recent years. This has created favourable capital supply-and-demand dynamics that are supporting more attractive entry valuations and improved yield potential.?

3. Focus on resilience as we head into 2026
Looking ahead, investors face a more nuanced world: moderated growth, potential inflationary pressures, and heightened geopolitical risk. We believe private markets are well placed to navigate this environment and contribute positively to diversified, resilient portfolios. Taking into account the characteristics outlined above, we believe that the most attractive private market opportunities today are characterised by the following fundamental features:

• Balanced capital supply/demand, supporting attractive entry valuations and yields.
• Domestic exposures?that help mitigate geopolitical and trade-related volatility.
• Access to differentiated risk premia?via innovation, complexity, transformation, or market inefficiencies.
• Downside resilience?through lower leverage or underlying asset backing.
• Reduced correlation?to public markets through idiosyncratic drivers or uncorrelated risk exposures.

4. Recalibration brings opportunity in private equity and real estate
Valuations across private markets have undergone a significant recalibration over the past 18 months.

In private equity, the environment now favours disciplined investors with dry powder, a targeted focus and the ability to support transformative growth. We see compelling prospects in particular for small and mid-market buyout strategies targeting local champions, continuation investments that capitalise on evolving buyout market dynamics and seek to drive the next phase of growth for prized companies, and selective early-stage venture providing exposure to multi-polar innovation.

In real estate, substantial repricing appears to have bottomed out in many sectors. Stabilised yields and improving transaction volumes suggest a healthier market dynamic, setting the stage for attractive future vintages. The focus is shifting from repricing to repositioning — towards assets aligned with secular trends such as decarbonisation, affordable housing and logistics infrastructure that supports digital commerce and near-shoring trends.

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