Private Markets Surge in Popularity as Advisors Embrace Alternative Allocations
17 APR, 2025
By Jose Luis Palmer from RankiaPro Europe
Wealth managers across Europe and beyond are witnessing a marked shift in investor appetite: private markets, once the preserve of large institutions, are rapidly becoming central to modern wealth portfolios. According to Adams Street Partners' inaugural 2025 Advisor Outlook, the demand from affluent individuals for private market exposure is rising fast — and financial advisors (FAs) are positioning themselves as essential conduits in this transformation.
92% of surveyed advisors expect private markets to outperform public markets over the long term, and nearly seven in ten anticipate an increase in the share of clients investing in private markets over the next three years. “Private markets are becoming an essential part of a well-diversified portfolio, and financial advisors are on the front lines of this shift,” said Jim Walker, Partner & Global Head of Wealth at Adams Street.
From Niche to Necessity
The report, The Rise of Private Wealth in Private Markets, gathers insights from over 100 financial advisors across North America, Europe, and Asia. It paints a clear picture: private wealth is becoming a critical growth engine for the private markets ecosystem, thanks in large part to a democratization of access via new product structures and platforms.
One of the most significant developments fueling this expansion is the proliferation of evergreen fund structures. Unlike traditional closed-end funds with capital calls and illiquidity constraints, evergreen vehicles offer periodic liquidity, lower minimum investments, and simplified tax reporting — features that are proving essential to attracting individual capital. According to the survey, 44% of advisors prefer evergreen structures, while only 37% favour traditional closed-end funds.
“The industry is evolving rapidly to support financial advisors as they seek to grow and protect client wealth,” added Walker, noting the importance of institutional-grade access and education for advisors serving private wealth clients.
Barriers Fall, Demand Rises
Individual investors currently account for around $2.7 trillion — one-fifth — of the $14 trillion in global private markets assets under management, according to Morgan Stanley. This share is expected to climb to 37% within five years, highlighting a profound reallocation of capital towards alternatives.
“As access expands and product innovation accelerates, we see a meaningful opportunity to deliver differentiated returns through high-quality private equity and private credit investments,” said Jeffrey Diehl, Managing Partner & Head of Investments at Adams Street.
Still, challenges remain. A majority of advisors (69%) say the complexity of private markets makes it difficult to communicate effectively with clients. Just 49% rate their own expertise as advanced, with client understanding even lower — only 32% of FAs believe their clients possess advanced knowledge of the space.
This underscores a key role for professional advisors: bridging the education gap and ensuring clients fully understand how private markets align with long-term financial goals. As Roman Berri, Global Head of Fund Offerings at Julius Baer, noted: “Private markets offer a more robust portfolio for clients as the universe of private companies is larger than listed companies.”
Europe: Hunting for Opportunity
Regionally, Europe-based advisors are particularly focused on accessing new investment opportunities. As James Beck, Partner and Head of Investments at James Hambro & Partners, observed: “Europe is less penetrated and valuations are cheaper, but has many of the similar attractions of the US market. We expect more growth in Europe in the coming years.”
In terms of sectors, technology and tech services top the list for advisor interest in 2025 (58%), followed by financial services (42%) and energy/utilities.
The Evergreen Advantage — and Caution
Evergreen funds are undeniably opening doors, but advisors remain cautious about liquidity risks. 59% of FAs cite fund gating as a concern, while others point to potential lower return profiles and a continued need for investor education.
“While evergreen structures have a lot of advantages, including offering an alternative way to access a diversified portfolio of PE-backed companies, liquidity remains a key consideration,” said Berri.
Beck also stressed the importance of manager selection, especially for first-time private market investors. “It comes back to making sure you partner with the right people, who are willing to grow in the right way,” he said, noting that consistency in performance and alignment across evergreen and institutional mandates is critical.
Advisors as Catalysts for Growth
Ultimately, Adams Street’s findings reinforce the central role of financial advisors in opening up private markets. Client demand, diversification, and superior risk-return profiles are the top factors behind the growing interest in alternatives.
As the private wealth channel grows, so does the responsibility — and opportunity — for advisors. “Unlocking the full potential of the private wealth channel will require collaboration between advisors and investment managers to improve understanding of the asset classes available,” concludes the report. “Knowledge breeds confidence.”
