The year 2025 is poised to redefine private markets, with transformative trends in private credit, AI-driven opportunities, M&A and IPO activity, and real estate tailwinds. As BlackRock’s recent 2025 Private Markets Outlook reveals, private markets are on a trajectory of unparalleled growth, evolving across geographies and asset classes to meet the demands of a rapidly shifting economic landscape. Industry estimates project private markets will grow from $13 trillion today to more than $20 trillion by 2030.
The Resilience of Private Markets in 2025
Private markets’ resilience is setting the stage for a new phase of growth in 2025. Fundamentals remain robust, with elevated investment activity, a rise in exits, lower financing costs, and increasing demand for long-term capital. Retail wealth segments are expected to boost allocations to private markets as investors seek long-dated, profitable assets to match liabilities. This wave of investment into the real economy will help transform markets and industries alike.
Alternative Investments: A Strong Outlook
The alternative investments landscape is expected to flourish further in 2025. Featuring private equity, real estate, private debt, and venture capital, the sector is projected to expand by 10-15%, fueled by increased allocations from pensions, sovereign wealth funds, and retail wealth channels. Industry leaders emphasize the importance of due diligence and innovative strategies to maximize portfolio performance as the market grows.
Private Credit: Accelerating Expansion
Private credit, currently valued at $1.6 trillion in global AUM, continues to grow as a scalable asset class. The asset-backed finance sector alone represents a $5.5 trillion addressable market in the U.S., where private lenders hold only a 5% market share. Additionally, private credit is expanding globally, with significant growth opportunities in Europe and Asia-Pacific. The emphasis on granular credit selection and structural protections underscores its resilience, even amid market dispersion.
AI-Driven Opportunities: The Next Frontier
Artificial Intelligence (AI) is revolutionizing industries, creating a wealth of opportunities across private asset classes. From data centers and data infrastructure to power generation and transmission, AI’s buildout requires substantial capital. Infrastructure investors stand to benefit from partnerships in areas like “behind-the-meter” solutions for renewable energy sources powering data centers.
Experts highlight AI’s transformative potential, ensuring investment strategies align with this rapidly evolving landscape.
Private Equity: A Resurgence
Private equity is experiencing a turning tide, with deal activity in 2024 exceeding pre-pandemic averages by 45%. The increased focus on returning capital has offered relief to investors, while valuations tracking below public markets present attractive entry points. Middle-market opportunities, fueled by M&A and IPO activity, are expected to drive exits and distributions in 2025.
Valuations in private equity continue to track below public markets, offering attractive entry points. Among sectors, opportunities across healthcare, specifically take-private deals and corporate carveouts, and AI-fueled LBO activity are anticipated to gain momentum.
Real Estate: Entering a New Cycle
After a challenging downturn, the real estate sector is poised for a recovery in 2025, driven by economic tailwinds and structural trends. Opportunities abound in areas such as energy-efficient buildings, e-commerce facilities, and Asia-Pacific growth markets.
Investors are optimistic about long-term structural trends around aging demographics in developed countries and properties aligned with new trade and energy demands. Asia-Pacific presents a compelling mix of growth potential and market diversification.
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