As a relatively illiquid asset class, characterized by high investment minimums and long hold periods, PE has not always been a natural fit for smaller, retail investors. The potential for non-institutional capital to turbocharge PE fundraising, however, is immense. According to the Allianz Global Wealth Report 2025 , private households hold €269 trillion (US$316 trillion) of financial assets, yet only a small percentage of this personal wealth is invested in private capital, with non-institutional allocations much smaller than those made by institutional investors. Even unlocking a relatively small slice of the retail market would have a meaningful impact on private markets’ AUM. PE managers have been working hard to adapt new structures, such as semi-liquid and evergreen funds, which dovetail more neatly with retail investors’ preferences. Regulatory developments are also opening up opportunities to tap into the non-institutional investor base, with the EU’s ELTIF 2.0 structure and the signing of an executive order in the U.S. advising federal agencies to make it easier for 401(k) plans to invest in alternative assets, putting the foundations in place to support an acceleration of the democratization trend. “Regulation has paved the way for GPs to raise money from non-institutional investors, but it is not an easy lever to pull because of the back-office resource it requires to manage a much higher number of smaller investors,” Comis says. “Smaller managers will have to work with partners in insurance and private banking to reach this capital base.”
channels. There will be a continued focus on diversification into different asset classes, (such as secondaries, private credit, venture and fund-of-funds), different and evolving structures (such as hybrid and evergreen funds) and different distribution channels (such as private wealth). LPs are moving toward fewer, multi-strategy relationships that provide access to co- investment opportunities and other access to private markets. These dynamics are propelling acquisitions of specialist firms, with Dechert having a key advisory role in several such deals. These include Goldman Sachs’ recently announced pending acquisition of Industry Ventures, a leader in venture and growth fund-of-funds, secondaries and co-investments, which further diversifies Goldman Sachs’ US$540 billion alternatives investment platform; and Barings’ acquisition of Artemis Real Estate Partners, a US$11+ billion real estate investment firm, which strengthens Barings’ position in the U.S. real estate market and accelerates the platform’s long-term growth by combining the firms’ complementary investment capabilities and expertise. Private markets democratization drive The survey also highlights the growing influence of the non- institutional investor base when it comes to fundraising. A majority of respondents expect between 10% and 25% of their next fund to come from retail investors, with optimism around the potential of opening up PE to the retail investor especially high in Asia, with more than a third of APAC- based respondents expecting more than 25% of their next fund to come from a retail investor base. The growth in the non-institutional market could provide a timely boost for fundraising at a time when the core institutional investor market has cooled.
What percentage of your next fund do you expect to come from retail investors?
70%
60%
58%
60%
56%
50%
45%
40%
35%
31%
27%
30%
26%
20%
17%
20%
14%
11%
10%
0%
Lȃss thǸn 10%
Bȃtwȃȃn 10% Ǹnd 25%
Ovȃr 25%
EMEA
North AmȃricǸ
TotǸl
AsiǸ-PǸcific
22
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