Private assets are assuming an increasingly central role in contemporary wealth management strategies, offering avenues for enhanced portfolio diversification, potentially superior risk-adjusted returns, and access to investment opportunities beyond the scope of public markets. 

As global financial landscapes continue to evolve and clients express a growing demand for more personalized and sophisticated investment solutions, wealth managers are progressively turning their attention to private equity, hedge funds, art, infrastructure, and other private investments to cater to these evolving needs. 

This blog delves into the growing significance of private assets for wealth managers, drawing upon recent market data and insights projected for 2025.

The Growing Role of Private Assets in Wealth Management

Private assets, by definition, encompass investments that are not traded on public exchanges. This broad category includes diverse asset classes such as private equity, hedge funds, art, infrastructure, private debt, real estate, co-investments, and evergreen funds. The escalating appeal of private assets stems primarily from their potential to generate higher long-term returns while simultaneously providing diversification benefits that can mitigate risks associated with the inherent volatility of public markets. A notable indicator of this trend is the resurgence in global private equity activity. 

According to McKinsey’s Global Private Markets Report 2025, following two years of contraction, global private equity dealmaking experienced a significant rebound in 2024, increasing by 14% to reach approximately $2 trillion. This substantial increase underscores the renewed confidence and substantial capital flows within the private equity sector, signaling its continued importance in the broader investment ecosystem. 

Wealth managers are increasingly recognizing that a holistic approach to portfolio construction necessitates the inclusion of private assets to meet the increasingly sophisticated and individualized objectives of their clientele.  

Key Private Asset Classes Available to Wealth Managers

Private equity involves investments in non-public companies, offering potential for high growth and diversification, with deal activity showing a strong rebound in 2024. Historically, private equity has outperformed public markets over the long term, making it an attractive component of wealth management strategies. A more detailed blog post on Private Equity is available on our website.  

Hedge funds are actively managed investment pools employing diverse strategies to achieve absolute returns, often with higher fees and less regulation. They offer diversification and downside protection, and the industry is seeing evolving fee models and growing investor interest in specific strategies. A more detailed blog post on Hedge Funds is available on our website.  

Art as a private asset provides unique benefits like potential value appreciation and low correlation with traditional markets, serving as a diversification tool. While valuation can be complex, the art market in 2024 showed resilience in lower-priced segments and a growing online presence. A more detailed blog post on Art as a Private Asset is available on our website.  

Infrastructure investments in essential services like energy and communication offer stable cash flows and potential inflation protection, attracting increased attention from wealth managers. Subsectors like renewable energy and digital infrastructure are experiencing significant growth. A more detailed blog post on Infrastructure is available on our website.  

Conclusion

The landscape of private assets in wealth management is dynamic and continues to evolve. Private equity demonstrates a strong potential for long-term growth, with recent rebounds in dealmaking activity. Hedge funds offer sophisticated strategies for diversification and absolute returns, navigating an evolving fee and regulatory environment. Art presents a unique asset class with low correlation to traditional markets, gaining traction in wealth management portfolios. Infrastructure, with its stable cash flows and inflation protection, is becoming increasingly important, especially with the rapid expansion of renewable energy and digital infrastructure. Wealth managers who understand these nuances and can leverage data-driven insights will be well-positioned to guide their clients in effectively incorporating these alternative asset classes into their overall financial strategies.