Growth of PE Net Asset Value and Market Cap4
2000–1H 2020
Large institutions were early entrants into the private markets and remain the predominant investors.
Many have dedicated a substantial investment, with private market allocations for pensions, endowments and foundations generally ranging from 10% to 20%.3 The chart below shows how the asset class has grown over the past two decades as more investors have come to realize its benefits.
Looking ahead, allocations could continue to grow. A recent McKinsey & Co. study on private markets found that 79% of surveyed limited partners plan to increase their private equity allocations. Twenty-three percent plan to increase them considerably.
Even though more institutions have carved out a meaningful allocation to private investments, high-net-worth and mass affluent investors have not had the same opportunity to participate. Large investment minimums and private markets’ illiquidity were two of the largest barriers for individual investment. But as the asset class has grown — and public markets have shrunk — private market managers, and in the U.S. even the SEC, have explored opportunities for private markets to become more accessible to individual investors.
As a result of those efforts, more large private market managers with institutional investor bases have developed fund structures that remove some of the traditional barriers to retail participation.
Disclosures
3Source: McKinsey Global Private Markets Review 2021
4Net asset value equals assets under management less dry powder. Market cap is based on the total market cap of companies globally.
4
How do investors access the asset class? >>
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Disclosures
3Source: McKinsey Global Private Markets Review 2021
4Net asset value equals assets under management less dry powder. Market cap is based on the total market cap of companies globally.
Looking ahead, allocations could continue to grow. A recent McKinsey & Co. study on private markets found that 79% of surveyed limited partners plan to increase their private equity allocations. Twenty-three percent plan to increase them considerably.
Even though more institutions have carved out a meaningful allocation to private investments, high-net-worth and mass affluent investors have not had the same opportunity to participate. Large investment minimums and private markets’ illiquidity were two of the largest barriers for individual investment. But as the asset class has grown — and public markets have shrunk — private market managers, and in the U.S. even the SEC, have explored opportunities for private markets to become more accessible to individual investors.
As a result of those efforts, more large private market managers with institutional investor bases have developed fund structures that remove some of the traditional barriers to retail participation.
Growth of PE Net Asset Value and Market Cap4
2000–1H 2020
Many have dedicated a substantial investment, with private market allocations for pensions, endowments and foundations generally ranging from 10% to 20%.3 The chart below shows how the asset class has grown over the past two decades as more investors have come to realize its benefits.
Large institutions were early entrants into the private markets and remain the predominant investors.
4
How do investors access the asset class? >>
