Private markets on the up?

Private markets can add value for some high-net-worth investors, but I wouldn't describe them as essential.
They remain a niche allocation because of their illiquidity, long investment horizons, valuation opacity and complexity. For the right client, they can provide diversification and access to businesses before they reach public markets, but only where liquidity needs are already well catered for.
We've been selective rather than significantly increasing exposure. Listed equities, cash and traditional alternatives remain the core for most portfolios.

Private markets should complement, not replace, a well-diversified investment strategy, and suitability should always take precedence over the latest investment trend.

Private markets can have a place in a high-net-worth portfolio, but “essential” is the word I would challenge. A good portfolio is not defined by how many unlisted assets it holds. It is defined by whether the client understands the risk, can lock money away and still has enough liquidity for real life.

The attraction is clear: private markets can offer access to areas public markets do not. But they can also mean higher fees, complex structures, limited transparency, valuation uncertainty and the reality that you may not get your money back when you want it.

We do not treat private markets as a fashionable default. For the right client, with genuine long-term capital and a clear need for diversification, they can be considered carefully. But cash reserves, pension planning, tax position and the ability to sleep at night come first.

Illiquidity is not sophistication. It is a risk, and clients need to be properly paid for taking it.

There’s a strong structural case for greater private markets exposure. In the US, companies are staying private longer, so more growth occurs before reaching public markets, while listed company numbers have steadily declined - making private markets a richer hunting ground for certain opportunities.

That said, I’m wary of suggesting they’re essential for every HNW portfolio. We’ve long accessed this space through listed trusts, accepting that NAV discounts and premiums bring risks and opportunities, while retaining daily liquidity.

For most clients, liquidity still matters. Locking capital away for a decade isn’t always compatible with changing circumstances, and fees are often higher and valuations less transparent than public markets.

Private assets should be held for something specific - access to growth unavailable publicly, or genuine diversification. The starting point is client objectives rather than the direction of industry flows.​​​​​​