Private capital assets globally could top $21 trillion in value by the end of the decade but regulatory complexity remains an obstacle to European fundraising.
Research from Dublin-based fund regulation and governance firm Carne Group, found that investors estimate that the total value of global private market assets will reach $21.08 trillion by 2030 – an $8 trillion (or 62%) increase on the market today, which latest industry data estimates to be $13 trillion.
The research is based on a survey of 201 investors representing $1.93 trillion in combined assets under management (AUM).
The democratisation of private markets, as evidenced by increasing allocations from defined contribution (DC) pension schemes and wealth managers, is a significant driver of this growth, the research found.
Of investors surveyed across the UK and Europe, DC schemes expect their sector’s level of investment into private markets to increase by on average 10% over the next three years.
Meanwhile, wealth managers anticipate private market investments to account for around 11% of their sector’s AUM by 2030, up from 5% in 2021.
Regulation was cited as a key obstacle to successful European fundraising by US managers, second only to concerns around corporate governance.
More than three-quarters (78%) agree that EU regulations around private assets are more complex than their US equivalents, while 68% believe that navigating these regulations will become even harder in the years ahead.
John Donohoe, CEO at Carne Group, said: “Amid increasing demand from wealth managers and DC pension schemes to drive greater, more sustainable returns for their clients, the democratisation of private markets is a rapidly growing and attractive opportunity for asset managers globally.
