Differences in how wealth is held across European economies are reshaping how asset managers approach private markets distribution, according to law firm Macfarlanes.
Germany, the UK, France and Italy together account for nearly three-quarters of household financial assets across the Eurozone and the UK. However, differences in how that wealth is intermediated are creating challenges for product design and distribution, the researchers said.
In the UK, nearly half of household financial assets are held through pensions and insurance wrappers. This contrasts with Germany and Italy, where wealth is usually held directly in general investment accounts, with less institutional intermediation, and distribution is mainly bank-led.
France sits between the two models, with long-term savings concentrated in insurance-based wrappers such as assurance-vie, which play a key role in distribution and product structuring.
The report highlighted that there is no “one-size-fits-all” approach to private wealth distribution in Europe, with managers required to adopt modular product structures tailored to local regulatory and distribution frameworks.
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In the UK, financial advisers, discretionary managers and platforms often operate separately, which can make things more complicated, especially when dealing with illiquid assets. Besides, many platforms were originally built for daily-traded funds, so they’re not always well suited to handling private market investments.
In contrast, countries like Germany and Italy rely more on banks, which creates a streamlined way of distributing investment products. However, this setup can come with trade-offs, said Macfarlanes, such as limited product choice and a tendency to favour domestic investment options.
The report also found that European Long-Term Investment Funds have seen renewed momentum following regulatory changes in 2024, with assets expected to grow in the coming years as liquidity rules have been relaxed and distribution frameworks expanded.
However, 4.4% of UK client assets are currently allocated to private equity, compared with 9% in Germany.
Macfarlanes partner Lora Froud said the push into private wealth is “about bringing asset classes that were previously only available to institutional investors into the private wealth channel”, but added this is not simply a case of repackaging. While the underlying strategies remain largely institutional, products are being adapted to meet different requirements around liquidity, diversification, leverage and fee transparency. As a result, private wealth vehicles typically offer greater liquidity than their institutional equivalents.
She added that scale cannot be viewed in isolation, as product-market fit varies significantly across Europe. “That is why a single pan-European approach doesn’t work,” Froud said, adding that distribution depends on local structures such as UK platforms or French insurance wrappers. While vehicles such as Eltifs and LTAFs address legal access and incorporate investor protections, operational and distribution challenges remain the main barrier to wider adoption.
“The key challenge in private wealth fundraising is often investor access rather than product availability. Distribution models and advisory frameworks play a decisive role in determining which private market exposures investors can actually reach,” the report stated.
