Aussie insto investors embracing private markets

Mike Taylor

Managing Editor/Publisher, Financial Newswire

6 June 2025

Just a day after the Australian Securities and Investments Commission (ASIC) released its assessment of the regulatory outlook for private markets, new research has pointed to institutional investors increasing their allocations from 39% to 45% within three to five years.

State Street fourth annual Private Markets survey has pointed to growing optimism about alternative investments in Australia and the broader APAC region.

Based on a survey of 450 institutional investors globally including multi-asset managers, private markets managers, pension funds and insurance companies, the research shows Australian institutional investors expect to increase private market allocations to 45% over the next 3 to 5 years, up 6 per centage points from 2024’s survey responses – the largest increase of any APAC country.

It found that six in 10 Australian respondents currently have 10% to 39% of their portfolio allocated to private assets.

“Over the next 3–5 years, this is expected to shift, with 7 in 10 anticipating an allocation above 30%, and 4 in 10 expecting to allocate more than 50% to private markets,” it said.

The analysis said that across APAC more broadly, institutions plan to marginally increase allocations to private markets from 35% to 38% over the 3-5 year period, continuing a steady upward trend noted in previous years.

Commenting on the data, State Street’s Head of Australian Product Team, Cleyde Hazell said the result reflected confidence in private market assets and growing institutional readiness for alternative vehicles ion the current macroeconomic environment.

“We are seeing increased interest in private markets assets that offer relatively low volatility compared to public markets,” he said.

“Renewed uncertainty about the world economic environment from the new US administration’s tariff policies and the possible reciprocations from its major trading partners, is influencing institutions’ investment strategies. Australian investors are responding to these structural and market shifts by embracing private markets and they are doing so more assertively than their regional peers,” Hazell said.

The State Street research said private equity continues to be the most appealing private markets asset class for institutional investors across APAC with 75% of respondents expected to increase their allocation to private equity over the next two years compared to 66% globally.

Among APAC countries, respondents from Australia (47%) and Singapore (38%) seeprivate debt benefitting the most from the growth of semi-liquid funds.