The asset management industry is undergoing a profound shift. Just as public equities broke into the mainstream in the 1950-1980s, and public fixed income followed in the 1980-2000s, the last decade has been the era of private markets. During this time the search for illiquidity premia and return sources that are uncorrelated with public markets pushed alternative strategies into the spotlight, moving them from a specialist corner of institutional portfolios into the mainstream of global wealth management
With institutional pipelines no longer sustaining meaningful growth, this shift is forcing asset managers to rethink not only what capabilities they need, but how they build, deliver, and scale them. Building organically can be a multi-year exercise requiring patience in a world where stakeholders increasingly demand instant results. To accommodate this, three distinct approaches have emerged – buy, partner, and outsource – each reshaping the competitive landscape in different ways.
The first of these, buying, reflects that certain capabilities simply take too long to credibly develop internally. Private markets require specialised expertise, origination networks, structuring, technology infrastructure, and client servicing models that many firms cannot assemble quickly enough on their own.
Unsurprisingly, this has helped fuel consolidation across the industry. Analysis from Morgan Stanley-Oliver Wyman indicates that the asset management sector has averaged more than 200 M&A deals per year since 2022 – double the previous decade’s average. Much of that consolidation is driven by managers seeking private markets capabilities to remain relevant as flows shift away from traditional asset classes.
Alongside acquisitions, managers are increasingly forming strategic partnerships with competitors around specific products, themes or strategies. These collaborations are built on complementary strengths – typically one firm will bring a differentiated investment engine, such as private market sourcing or underwriting, while the other brings the distribution reach, often through longstanding advisor relationships or regional networks.
One recent study counted 31 such partnerships between traditional and alternative managers over the past five years, underscoring how quickly this model is proliferating. Importantly, these partnerships are almost never exclusive, and managers are assembling a mosaic of partners tailored to different products or market dynamics. Partnerships offer a way to move faster without relinquishing strategic independence. But they also raise questions around durability and alignment. Long-term success will depend on clear incentives, cultural compatibility, and the ability of partners to evolve together as client expectations or markets shift.
The third approach, outsourcing, is essentially an evolution of the institutional placement agent model, reconfigured towards the wealth market. These partners do more than just open doors. They provide marketing advice, advisor education, due diligence frameworks, operational infrastructure, and the servicing architecture capable of handling subscription processes and capital calls at scale. They may also help managers navigate local regulatory frameworks, local preferences, and the practicalities of launching products in formats that resonate with particular markets.
For many managers, especially those without extensive global distribution footprints, outsourcing offers a practical way to accelerate growth in wealth channels that would be costly or impossible to build organically.
At Barings, we see these approaches not as mutually exclusive but as complementary tools in a broader strategic toolkit. We have built many franchises such as direct lending organically, and in recent years we have acquired targeted and complementary capabilities, including the 2023 acquisition of Australian structured‑finance specialist Gryphon Capital Partners and the 2025 purchase of US real‑estate equity manager Artemis Real Estate. In 2025, we formed a strategic product and distribution partnership with Invesco. For years we have leveraged specialist distribution partners to augment our in-house distribution capabilities in regions and markets that are difficult to penetrate directly.
This hybrid model reflects our view that distribution, particularly in private markets, is increasingly multifaceted. No single approach offers all the answers, and flexibility is now a competitive advantage in its own right.
As private markets globalise and wealth ecosystems mature, the firms best positioned to succeed will be those that blend the three strategic models effectively. Acquisitions accelerate capability building. Partnerships unlock innovation through complementary strengths. Outsourcing ensures products reach a broader universe of clients than might otherwise be possible.
Asset management is shifting toward a more interconnected, collaborative architecture. In this environment, we believe that managers who embrace a mix of ownership, partnership, and alliances will be best placed to deliver the private‑market solutions that investors increasingly expect.
The author, Martin Horne, is co-head of global investments at Barings.
