Insto investors back ‘long-term value’ of private markets

Yasmine Raso

Senior Journalist

6 May 2026

Unwavering appetite for untapped and unconcentrated opportunities in artificial intelligence (AI) is forcing investors to turn to private markets, joining institutional players in recognising its “long-term value” and “diversification advantages”.

According to private markets investment firm Hamilton Lane’s 2026 Market Overview, the demand for AI is only one trend driving private markets towards a new era, as muted gains in public markets redirect investors towards opportunities where “venture capital [is better] positioned to lead AI investment activity”.

“With public markets remaining highly concentrated in a small group of AI-linked companies, private markets – specifically venture capital – can provide broader exposure and diversification, which may be more important now than ever,” Hartley Rogers, Executive Co-Chairman at Hamilton Lane, said.

The report also highlighted evergreen funds as a popular method for investors to enter the private markets space, offering lower minimums, more diversified portfolios and the option for periodic liquidity.

“Based on Hamilton Lane’s 2026 Market Overview data, private equity and secondary-focused evergreen funds have outperformed closed-end fund peers across one- and three-year periods. This runs counter to the narrative that investors may sacrifice returns for a friendlier structure and the option for liquidity,” a statement from the firm said.

“The secondary market is another growing area with strong underlying dynamics and tailwinds. Supply continues to outpace capital, creating attractive entry pricing and offering investors portfolio-level flexibility and faster deployment. Representing only approximately 2% of NAV, this market has room to grow.

“Private credit also remains resilient, having outperformed its public benchmark every year for 24 years and by hundreds of basis points over the past decade as of 30 September 2025.

“Despite questions around a possible bubble, the forces that have been reshaping the private credit landscape globally have only grown during a bull market for credit, and it is showing limited signs of stress.”

Scott Thomas, Head of Private Wealth at Hamilton Lane, Australia, said superannuation funds have gravitated towards private markets for its long-term benefits, while private wealth investors have recognised its benefits in more flexible structures, lower minimums and clearer reporting.

“We are at a critical moment for global investing, as geopolitical fragmentation, tariff tensions, shifting monetary conditions and rapid technological disruption – especially artificial intelligence – set the stage for increasing volatility,” he said.

“For investors in Australia, this means remaining focused on key elements of their private market exposure including valuation consistency, data quality and liquidity management.”