‘No plans’ for private market exposure for third of advisers

Private markets are falling out of favour with financial advisers, according to VanEck, with more than a third saying they have ‘no plans’ to allocate to the asset class.

The firm’s 2026 Smart Beta Survey found two-thirds of advisers say they are “unsure” about the outlook for the asset class over the next three years.

Almost 1,000 financial professionals were questioned for the survey which showed allocations to private assets have fallen from 60 per cent of respondents to 50 per cent.

Active allocations to private market assets have also declined by 15 per cent from 2025, and opportunistic allocations have fallen by 17 per cent, signalling a strong sentiment shift.

Over a third (35 per cent) said they have ‘no plans’ to allocate client funds to the assets, up from 22 per cent in 2025.

Only 14 per cent said they were considering an allocation, a decrease on 18 per cent in 2025.

Nearly 40 per cent of respondents already have a zero allocation to private market investments, with the remaining third having between 5 to 10 per cent.

The top concerns were about liquidity constraints (39 per cent) followed by high fees or lack of transparency at 18 per cent. ASIC’s regulatory push on the assets, flagged again this week by commissioner Simone Constant, was a concern for 10 per cent.

Liquidity constraints may be a concern but Morningstar and HarbourVest previously stated that the use of gating periods or lock-ups are a sign that the system is working.

Chief executive of HarbourVest Partners, John Toomey, said: “All this gating that has been going on, that’s a feature of the funds not a flaw. The structure exists in the way that it does and people should not be surprised that there’s a gate because that’s an important part of the vehicle.

“It’s important for the long-term attraction of private markets, people will look back on this and say ‘it was important that this happened’ because it showed the industry dynamics are working and people now better understand that these are open-ended vehicles, they aren’t semi-liquid ones, and they may have liquidity but sometimes they won’t have a lot.”

What is the biggest barrier to increasing your allocation to private markets?

Source: VanEck, September 2026

VanEck chief executive and managing director – Asia Pacific, Arian Neiron, said: “Private assets are struggling to attract investor capital today compared to a year ago.

“With bond yields sitting at around 5 to 7 per cent return for fixed income products such as subordinated debt and floating-rate strategies, investors are questioning whether the risk premium on offer is adequately compensating for the additional risk that comes from investing in private credit.

“In our view the premium on offer is becoming harder to justify with so many headwinds. This is strengthening the case for advisers and investors to move their allocations away from private credit and into public markets, particularly income-oriented exposures.

“Our discussions with advisers point to a challenging environment and headwinds for private markets. Appetite is weakening and these concerns are driving portfolio allocation decisions, with ETFs emerging as a direct beneficiary of this shift.”