The 44th edition of the Coller Capital Global Private Capital Barometer reveals that geopolitics is playing a greater role in private markets allocation decisions than previously, as surveyed Limited Partners (LPs) also show signs of becoming more selective about the GPs they deploy capital to.
Just over a third (37%) of surveyed LPs say the geopolitical environment and outlook are influencing their private markets allocation decisions more than in the past, with nearly half of European (46%) and Asia-Pacific (47%) investors saying this.
At the same time, LPs are becoming more selective, with almost a quarter (23%) of LPs expecting to reduce the number of GP relationships across their private markets portfolios over the next three years, compared with 16% when Coller Capital last asked the question in 2020.
Despite this, LPs remain resilient in their support of private markets with a third (33%) expecting to accelerate their rate of commitments to private markets, while 57% expect their pace to remain the same over the next two years.
The widely read bi-annual barometer surveyed 108 LPs from around the world, more than half (55%) of whom had more than $10 billion under management and collectively oversee over $2 trillion in assets.
Jeremy Coller, Chief Investment Officer and Managing Partner of Coller Capital, said: “Recent high-profile public market moves have put the exit window back at the centre of the conversation. That is encouraging, but it would be wrong to see IPOs and secondaries as competing routes to liquidity.
“The barometer makes it clear that they are complementary. Secondaries have become a core route to liquidity and a central part of how LPs allocate, rebalance portfolios and retain exposure to assets they continue to have conviction in. Two-fifths of LPs in this barometer expect continuation vehicle activity to keep growing even as traditional exits recover, which tells you something about how structural this shift to secondaries has become.”
LPs brace for more zombie funds
LPs in the survey expect more ‘living dead’ funds to emerge in their private equity portfolios, and most are taking a pragmatic approach to managing the situation. More than half (54%) of LPs expect the number of “zombie funds” in their private equity portfolios to increase over the next two years. A further 31% expect the number to remain stable, while just 15% expect a decrease.
However, LPs are not necessarily looking for confrontational solutions. In no-fault situations, the preferred response is a management fee step-down, cited by 54% of respondents. Manager incentive resets, where fund economics are revised to encourage timely exits, come in second at 18%, while manager removal or replacement and taking no action are each favoured by 11% of LPs.
Private credit primary allocation growth cools, but credit secondaries are expected to grow
After several years of rapid expansion, private credit appears to be entering a more selective phase. The proportion of investors expecting to increase their target allocation to private debt or credit over the next 12 months has fallen from 42% in Coller Capital’s previous barometer to 29% in this edition.
Meanwhile, private credit secondaries are expected to be a major growth area. LPs rank private credit as the asset class likely to see the greatest proportional growth (36%) in the secondary market over the next three years, ahead of private equity, infrastructure and venture capital. This points to a shift in how investors may seek exposure to private credit, with greater emphasis on seasoned assets, portfolio rebalancing, relative value and active liquidity management.
At the same time, LPs have a more nuanced view of current concerns around private credit than some market commentary might suggest. Only 18% believe there is a systemic problem in the asset class, while 53% believe there is isolated risk above and beyond initial expectations. A further 29% are comfortable that risk is in line with expectations.
Continuation vehicles remain embedded even as exit conditions improve
The barometer also shows that LPs have differing views on whether GPs are striking the right balance between providing liquidity and allowing portfolio companies more time for value creation. While 40% of LPs believe GPs are generally getting the balance right, 39% say GPs are not providing liquidity early enough. A further 22% say some of the best companies are being sold too early.
Against this backdrop, continuation vehicles appear to have become an established feature of private markets rather than a temporary response to subdued exit conditions. Industry data underscores this: GP-led secondary volume reached approximately $106bn[1] in 2025, a record level achieved even as broader exit activity remained constrained. Even when traditional exit channels improve, 40% of LPs expect new continuation vehicle activity to continue increasing, while 29% expect it to remain at current levels and 31% expect it to decline.
Stuart Tait, Head of LPPA Partnerships, UK & EU, at San Francisco-based enterprise resource planning platform Carta said: “The barometer shows that the secondary market is becoming a core portfolio management tool for LPs. As a result, secondary deal flows are accelerating and due diligence windows are shortening, creating greater operational demand. Breaking down this operational burden is where AI has the most immediate value for LPs and secondary buyers.
“LPs’ biggest constraint has become the time it takes to collect, extract, and process the underlying data before applying judgment. Making use of AI puts firms ahead of the pack by eliminating these bottlenecks and freeing up time for analysts to spend on making the investment decisions that drive returns, rather than wrangling fund documents and data. In a secondary market where the gap between a good price and a great one can depend on how quickly and accurately you can underwrite a portfolio, that operational edge delivers tangible benefits.”
