How will Private Markets fare in 2025? The view from four top fund managers

As we head into 2025, there’s good reason to believe that this will be the year semi-liquid Private Markets funds really take off among UK investors.

These funds have already seen a massive uptake in the US retail investor space. And the UK may not be far behind.

The term Private Markets refers to assets that are not traded on a public exchange. This category of investments includes private equity, private credit, infrastructure and real assets. Private Markets have tended to outperform their listed equivalents over the past 30 years, although past performance is not a guide to the future.

Until recently, Private Markets funds were only available to ultra high net worth individuals, family offices or big institutions like pension funds. Fortunately, though, times are changing. With the rise of flexible new structures such as semi-liquid funds, this potentially attractive asset class is now well within reach for experienced investors, with minimum investments starting from £10,000.

So why might experienced investors consider adding Private Markets to their portfolio? What’s the outlook for these investments in 2025? And what are the main trends to keep an eye on?

Below you’ll find high-level views from four top private market managers – EQT, Apollo, Schroders Capital and Hg. In a few places, we’ve summarised their views in our own words. Whether these views come true, time will tell.

The world is on the brink of an infrastructure transformation, according to EQT. The transition to clean energy and a more resource-efficient, circular economy, as well as the digitalisation of society, will reshape the US and the global economy.

This transformation isn’t a distant future – it’s unfolding now and will need hundreds of billions of dollars in new data centres, fibre optic networks, power grids and more.

In this environment, infrastructure strategies could offer investors an opportunity to balance a portfolio via investments in essential services to society – with predictable cash flows, asset-based and well-protected business models.

Despite the Federal Reserve’s recent shift to easing monetary policy, Apollo expects US interest rates to remain higher for longer. The incoming Trump administration’s focus on tariffs, taxes and immigration is likely to stimulate inflation – keeping rates close to their current elevated levels.

Apollo sees this ‘higher-for-longer’ environment as positive for direct lending (the most common type of private credit) due to two main reasons. First, since direct lending is typically ‘floating’ rate – i.e. tied to a market reference interest rate – yields will benefit in a higher interest rate environment. Second, private credit continues to offer wider credit spreads than public markets, contributing to higher overall yields.

Opportunities for investors in direct lending may also be bolstered by a pick-up in M&A and dealmaking, as the Trump administration relaxes business regulations. Apollo believes that the best opportunities will be found in business and financial services, healthcare and information technology.

Schroders anticipates 2025 to be an attractive environment for new private market investments as cycles relating to fundraising, technological disruption and the global economy align favourably.

Thanks to the development of the private equity industry, businesses can now raise large amounts of money without needing to go public. The only way investors can access these firms, therefore, is through private deals.

Investors have traditionally favoured large private equity funds. Yet small and mid-sized funds have outperformed their large counterparts across different regions, investment strategies and economic periods. Companies targeted by small and mid-sized funds often transact at lower valuation multiples and offer greater potential for operational value creation.

In an era where large private equity funds are flush with capital, Schroders believes that the small and mid-sized segment offers a broader and more attractive set of opportunities.

Generative AI (GenAI) is one major trend on the radar of Hg – a private equity manager that invests in B2B software & services companies with a mission-critical product or service. As Hg notes, “the GenAI flywheel isn’t just spinning, it’s accelerating”.

Traditional AI has already expanded the scope of automation. Now GenAI is enhancing decision-making processes that previously required human intervention. By offering decision support, live prompts and document annotation, GenAI is enabling technology to penetrate deeper into business workflows – allowing human talent to focus on more strategic and creative tasks.

In 2025, Hg sees the GenAI revolution gathering pace. New technology adoption will rely on end-customers transforming their operations. And just like the transition from on-premise software to cloud Software-as-a-Service, Hg expects to see adoption of GenAI ripple out from tech-first companies into the broader business ecosystem.

If you’re an experienced investor who is potentially interested in private markets – but not sure where to start – we’d be happy to help.

There is lots of useful information on private markets on our website, along with detailed and impartial reviews of available funds.