We talk about the evolution and opportunities of private markets with Alexander Schoenfeldt (Lumyna)
3 MAR, 2025
Private markets have undergone a remarkable evolution over the past two decades, consistently delivering strong returns and expanding their role in global capital markets. As companies stay private longer and investors seek alternative sources of growth, private markets have become an essential component of institutional and high-net-worth portfolios. But what’s next for this rapidly evolving space?
In this conversation, we sit down with Alexander Schoenfeldt, Head of Investments at Lumyna, to explore the key trends shaping private markets in 2025 and beyond. From the rise of evergreen fund structures to the increasing appeal of private credit and insurance-linked securities, we discuss how investors can navigate new opportunities while managing risks in an uncertain macroeconomic environment.
What are your outlooks for private markets in 2025? How will this year differ from 2024?
Private markets have consistently outperformed public markets with global private equity generating annualised returns of 14% over the past two decades, nearly double that of public equities1. As companies increasingly remain private longer, the average IPO valuation has risen significantly, driving an expansion in the market value of private equity relative to public markets. We believe this shift is part of a broader transformation in how businesses access capital, with private markets now providing greater flexibility, scalability, and long-term growth potential.
What sets 2025 apart is the acceleration shift toward evergreen solutions within private markets. Traditional closed-end structures have long defined private investing, but as institutional and wealth allocators seek greater flexibility, evergreen models are gaining momentum. These vehicles reduce the inefficiencies of fundraising cycles and provide greater accessibility to sophisticated investment strategies.
At Lumyna, part of Generali Investments, we view this transition as the next frontier for private markets. Historically, private market access was largely confined to large institutions due to high barriers to entry and long lock-up periods. Today, the emergence of innovative fund structures is dismantling these barriers, enabling private wealth investors to participate in opportunities that were once out of reach.
As these dynamics continue to unfold, 2025 is shaping up to be a defining year for private markets, including private equity, private credit, and private insurance-linked securities. With expanded access and growing capital pools, private markets are positioned to continue their growth trajectory, unlocking compelling opportunities for investors.
What do you think are the main risks that funds investing in private markets will face this year?
Macroeconomic and geopolitical uncertainty are expected to remain a defining feature of 2025, creating both risks and opportunities. While private markets have demonstrated resilience through multiple economic cycles, the challenge today is not just navigating volatility, it is identifying true value amid complexity.
The past decade saw record fundraising, yet a significant amount remains undeployed. The result is growing differentiation between top-tier managers who can execute effectively and those struggling to put capital to work. We believe the dispersion between the best-performing funds and the median is widening, making manager selection more critical than ever in driving performance.
We prioritise identifying and partnering with managers who are not only skilled in weathering market dislocations, but who are true stewards of capital. Effective manager selection goes beyond track records. It’s about understanding how managers leverage expertise, access differentiated deal flow and structure investments that can withstand evolving market conditions.
This disciplined approach focused on robust liquidity solutions and institutional-grade governance, ensures that private markets remain a stabilising force within diversified portfolios.
Which segments of private markets do you currently consider most attractive?
Private markets have never been more interconnected. Allocations are no longer siloed, and the most sophisticated investors are thinking across asset classes. Today, the opportunity is not just in a specific segment but in the ability to construct portfolios that optimise for resilience, cash flow, and capital appreciation.
Private credit remains compelling, particularly in the less crowded opportunistic and special situations space, where dislocations have created an attractive risk-return dynamic, creating opportunities for funds to step in and provide new capital at more attractive rates than incumbent private debt funds, or potentially invest in existing debt at a discount through purchases in the secondary market.
We also see significant potential in private insurance-linked securities (ILS) as an uncorrelated diversifier, particularly with the rise of parametric solutions. Additionally, secondaries, both in private equity and private credit, offer investors access high-quality assets at a attractive valuations.
Infrastructure driven by the global transition to clean energy and digitalisation presents long-duration, yield-generating opportunities. Meanwhile, private equity is entering a phase of operational alpha, with value driven less by financial engineering and more by business transformation, sector specialisation, and technological innovation. The resurgence in M&A deal flow, with global transaction volumes surpassing $3 trillion in 2024, further underscores this shift. The increase in strategic transactions offers private equity firms a unique opportunity to leverage their deep industry expertise and operational capabilities to unlock value in sectors primed for disruption. We are also seeing increasing opportunities through corporate carve-outs, where private equity firms acquire under-managed business units from larger enterprises and transform them into more focused, stand-alone companies.
In addition to these segments, venture capital is an increasingly attractive space where we see potential for growth and innovation. The acceleration of technological innovation and the growth of sectors such as AI, clean energy, and fintech present significant opportunities for early-stage investors. As the venture capital landscape grows more competitive, firms must be adept at identifying scalable, high-impact companies that can disrupt industries and generate long-term value.
The future of private markets is not about a single asset class. It is the ability to navigate multiple asset classes dynamically, leveraging appropriate structures to capitalise on dislocations and structural trends.
What role do private markets play in institutional portfolio diversification in the current market environment?
With traditional 60/40 portfolios under pressure, private assets provide both return enhancement and risk mitigation. Beyond diversification benefits, private markets also offer something more fundamental: access to a growing segment of the real economy which is not adequately represented in public markets. Private companies are staying private for much longer, with this significant stage of value creation is missed by public market investors. There are also very large private companies that are having a material impact on the world around us, like Space X and Open AI for example, which cannot be accessed via public equity markets.
Private credit finances businesses in ways that banks no longer do. Infrastructure investments underpin critical global transitions in energy and technology. Private equity drives innovation, growth, and operational transformation. Real assets provide inflation protection and long-term capital appreciation.
We believe that the true value of private markets is unlocked by integrating them into broader portfolio construction. The next generation of institutional portfolios is likely to be defined by flexibility and a dynamic allocation framework where private markets are not just an alternative but a core component.
What are the main trends that will shape the future of private markets in the next 5-10 years?
The private markets landscape is undergoing a fundamental transformation. Over the next decade, we expect five major trends to shape the industry:
- 1. The rise of evergreen fund structures – The traditional closed-end model is evolving. Institutional and wealth investors are demanding more flexibility, and fund managers are responding with structures that provide ongoing capital access, liquidity windows, and reduced J-curve effects.
- 2. The evolution of the secondaries market – Secondary markets are deepening, offering access to high-quality assets at attractive valuations.
- 3. The shift from financial engineering to operational value creation – In private equity, the focus is shifting from leverage-driven returns to operational enhancements, industry expertise, and digital transformation.
- 4. The institutionalisation of private credit – Direct lending continues to emerge as a core pillar of private credit, filling the gap left by traditional banks. Capital solutions, asset-backed lending and NAV-based lending are gaining momentum, offering bespoke financing options for companies seeking flexible alternatives to public markets. As private credit expands, manager differentiation will be critical, with a focus on underwriting discipline and structuring expertise.
- 5. The integration of ESG and impact investing – Investors are demanding measurable, outcomes-based ESG integration, and private markets will be central to financing the transition to a more sustainable economy.
We are not just observing these trends, we are actively shaping them. Our focus on innovation, liquidity solutions, and institutional-quality access positions us at the forefront of the next evolution of private markets.
How do you see evergreen funds evolving?
Evergreen funds represent the next frontier in private market accessibility. Their ability to provide continuous capital deployment, liquidity windows, and a dynamic investment approach aligns with the evolving needs of investors. However, their success will depend on thoughtful structuring; balancing liquidity provisions with long-term investment horizons, ensuring transparent governance, and aligning incentives between managers and investors.
We are pioneering institutional-grade evergreen structures that provide our investors with access to private markets while maintaining the rigour and discipline of leading private market managers. The future of private market investing is not just about access. It’s about the ability to execute with strategic vision, discipline and a commitment to driving value over the long term.
Related to that, I’d like to ask about the newly launched evergreen fund, Lumyna – Twelve Capital Parametric ILS Fund. Can you tell us about this fund? How does it enhance liquidity?
The Lumyna – Twelve Capital Parametric ILS Fund is an evergreen fund designed to provide investors with efficient access to the growing parametric insurance market, which benefits from an attractive return and risk profile, whilst providing low correlation to traditional equity and fixed income assets. It focuses on private parametric transactions and other complementary insurance-linked securities (ILS), offering a differentiated approach to catastrophe risk investing. Traditional ILS funds rely on indemnity-based triggers, which can introduce delays in claim assessments and increase capital lock-ups. By contrast, parametric ILS utilises predefined event triggers such as earthquake magnitude or hurricane wind speed enabling faster, more transparent payouts which can mean greater liquidity for underlying investors in the strategy.
From a liquidity perspective, the fund is structured to optimise capital efficiency while offering stability in adverse conditions. Approximately 40-60% of the portfolio will be allocated to private parametric transactions and industry loss warranties (ILWs), providing exposure to bespoke, high-alpha opportunities. The remaining is invested in liquid catastrophe bonds, which can be traded in the secondary market to meet redemption needs. This dual-layered approach balances return potential with liquidity management, a critical factor for investors seeking flexibility in private markets.
The fund offers quarterly liquidity, a significant enhancement over traditional closed-end vehicles that often require longer lock-ups. Additionally, the parametric nature of these investments reduces trapping risk, a common issue in traditional ILS, where capital can remain tied up in loss-adjustment processes for extended periods.
We recognise that investors are looking for innovative, liquid solutions in alternative asset classes. The Lumyna – Twelve Capital Parametric ILS Fund represents the next evolution in ILS investing, combining sophisticated risk modelling, technological advancements, and liquidity-aware structuring to offer a highly diversified and uncorrelated solution.
And how does the Lumyna – Twelve Capital Parametric ILS Fund provide the diversification investors are looking for?
The fund offers diversification across perils, geographies, and structures, making it an attractive solution for investors seeking uncorrelated returns.
- Peril diversification: the fund primarily focuses on “peak perils” such as hurricanes and earthquakes, which have more reliable historical data and risk models. It limits exposure to secondary perils like wildfires, where modelling uncertainty is higher.
- Geographic diversification: the portfolio is globally diversified, ensuring exposure to multiple independent risk events rather than being concentrated in a single region.
- Structural diversification: by combining private parametric transactions, ILWs, and catastrophe bonds, the fund seeks to balance yield potential, liquidity, and risk management, reducing dependency on any single market dynamic.
Importantly, investors gain exposure to a market with attractive returns above cash, with low correlation to equities, bonds, and even traditional ILS funds, providing a highly effective portfolio diversifier.
We believe that true diversification is about more than just adding new asset classes. It’s about constructing portfolios that are resilient across different market environments. The Lumyna – Twelve Capital Parametric ILS Fund is designed to provide a differentiated, liquid, and institutionally structured solution that enhances overall portfolio stability while capturing uncorrelated return streams.
1. Source: Bain & Company as at December 2023
2. Source: Pitchbook Data as at December 2024
3. There is no guarantee that an investment objective will be achieved or that a return on capital will be obtained. The product does not benefit from any guarantee to protect the capital. Investment in the Funds carries substantial risk. Investment in the Funds is not intended to be a complete investment programme for any investor. Investment in the Funds is intended for experienced investors who are able to understand and accept the risks involved. A prospective investor should appreciate that the value of any investment, and any income from any investment, may go down as well as up and that an investor’s capital is at risk and the investor may not receive back the amount invested. Past performance is not indicative of future results.
4. There is no guarantee that an investment objective will be achieved or that a return on capital will be obtained. The product does not benefit from any guarantee to protect the capital. Investment in the Funds carries substantial risk. Investment in the Funds is not intended to be a complete investment programme for any investor. Investment in the Funds is intended for experienced investors who are able to understand and accept the risks involved. A prospective investor should appreciate that the value of any investment, and any income from any investment, may go down as well as up and that an investor’s capital is at risk and the investor may not receive back the amount invested. Past performance is not indicative of future results.
