Introduction
Introduction
Acuity Knowledge Partners has a strong, decades long relationship with the private markets sector, serving its professionals and executives across the sub-sectors - private equity (PE), venture capital (VC), private credit (PC), fund of funds (FoF), real estate (RE) and infrastructure.
This fourth edition of our sector-leading survey, measuring the pulse of the sector, also received an overwhelming response, helping us determine the markets’ environmental and operational aspects. It continues to present the associated opportunities and concerns, especially those since last year, when almost all the sub-sectors faced strong headwinds.
We had 115 respondents, representing all regions and with investing interest worldwide. In line with our previous surveys, North America, the UK and Europe, and Asia continue to account for over threequarters of the respondents in terms of location of headquarters and investment focus, as these regions have a heavy concentration of capital, private markets firms and investment opportunities. As we continue to widen our reach, other global regions (Africa, South America and the Middle East) maintain more than 20% representation in our survey, capturing global voice and opinions.
Key Takeaways
Rate cuts in 2024 support fundraising sentiment in 2025
Investment opportunities are expected to improve
Disruptive and emerging tech remain the key investment focus areas
Rising openness towards outsourcing and adoption of portfolio-monitoring tools
Fund accounting and portfolio monitoring account for a significant share of professionals’ time
ESG influences decision-making in private markets
Summary of observations
After two years of caution and high interest rates, the private markets sector is looking at 2025 with renewed optimism never seen since 2022. As the US Federal Reserve (Fed) lowered rates in 2024, along with other central banks around the world, optimism has risen, including in areas facing significant difficulty such as exits.
Conclusion
In this survey, we have expanded our scope to focus on private markets strategies, enabling a more granular understanding of their preferences and trends. Fundraising remained challenging, but optimism seems to be recovering. Despite some relief on the interest-rates front, fundraising faces challenges relating to exits, with lead partners’ cash tied up in investments and, therefore, unavailable for fresh fundraising. We are likely to see positive developments as respondents expect valuations to be supportive and exit challenges limited this year. However, the biggest challenge this year seems to be competition – for both funds and deals. Middle- and back-office activities consume a substantial amount of private markets professionals’ time. Portfolio monitoring also continues to take up a significant part of their time. The sector expects regulatory stringency and ESG adoption to continue. Fundraising remains the biggest challenge, with investment and exit opportunities likely to be among the top three concerns this year, leading to increased competition. After some respite last year from the challenges the sector faced in previous years, we expect these challenges to subside in 2025 and support growth of the sector.
About the Authors
Ambarish has about 17 years of experience in business research, analysis and consulting. He is engaged in leading deep-dive strategic projects, due-diligence support, issue-focused trend analysis and similar assignments for our Private Markets clients. His previous experience includes tenures with startups, the Big Four and consulting organisations, where he focused on industry studies, price forecasting, company analysis, macroeconomic studies and other strategic engagements.
Abhishek is an Associate Director with Acuity Knowledge Partners (Acuity) and has over 19 years of experience in market research, consulting and data analytics. He is an expert in primary research and project management. Abhishek is an active contributor to the primary research fraternity and has been awarded as Research Hero for 2023 by the prestigious Market Research Society. Abhishek leads multiple large client engagements and is instrumental in setting up Acuity’s primary research business
At Acuity, Rabin is overseeing multiple ESG engagements which includes research, analysis and reporting assignments for clients in the US and Europe. Overall, Rabin holds an experience of ~11 years which is spread across various areas of client management and interface within the domain of ESG and Sustainability. Rabin holds a post-graduate diploma in Sustainable Management from Indian Institute of Management, Lucknow
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