Private markets accounted for more than half of all new manager searches over the past year, according to research by Bfinance.
The firm’s latest market trends report showed that private markets represented 52% of all new manager searches in the 12 months to the end of September 2025, led by private real assets at 24% of mandates and private debt at 16%.
Bfinance highlighted activity in European direct lending, evergreen credit strategies, and value-add real estate as particular trends within private markets over the period.
Infrastructure themes linked to energy transition and digitalisation remained important drivers of investor interest, the report showed.
Private equity activity stalls
However, Bfinance indicated that private equity strategies had remained in a holding pattern through the third quarter, navigating a backdrop of sluggish exits, constrained distributions, and cautious deployment.
“Headline sentiment has steadied, but investors remain valuation-aware and selective. There is clear demand for quality, liquidity and diversified sources of return as institutions position portfolios for a more uncertain macro and policy environment.”
Mark Mortlock, Bfinance
The 34-page report found that managers continued to adapt to a slower realisation environment, with valuations stabilising.
Deal activity was largely driven by add-on acquisitions and growth capital opportunities rather than large buyouts, reflecting an emphasis on operational value creation and disciplined underwriting.
The analysis also found that the private equity secondaries market continued to provide a critical outlet for liquidity, although activity moderated slightly after a record first half.
Mark Mortlock, marketing director at Bfinance, said: “Headline sentiment has steadied, but investors remain valuation-aware and selective. There is clear demand for quality, liquidity and diversified sources of return as institutions position portfolios for a more uncertain macro and policy environment.”
Scrutiny increases amid record demand
The report follows announcements by the Bank of England and the Pensions Regulator (TPR) regarding separate investigative work looking at private markets investment.
TPR said this week that it intends to interrogate how pension schemes are investing in “growth assets” such as private equity and to identify potential barriers to access.
The regulator’s chief executive, Nausicaa Delfas, said it would engage directly with pension schemes to “better understand their approach to investing in private markets and infrastructure, as well as the current challenges and barriers they face”.
In Depth: Regulators begin work on private markets as interest grows
The Pensions Regulator and the Bank of England are launching separate exploratory exercises focusing on private markets, as pension scheme interest grows and the government continues to push for more domestic allocations. Read the full report.
Meanwhile, the Bank of England has launched a stress test exercise aimed at the UK’s private equity and debt markets, in an effort to measure how stress situations could affect the wider economy.
It will follow a similar path to its stress test of gilt and corporate bond markets, carried out in the wake of the 2022 gilts market crash.
Recent data from Ocorian, a fund and asset servicing company, forecast that the value of global private markets funds was expected to reach $24trn (£17.9trn) in the next five years amid surging demand from pension funds around the world, an increase of more than 70% on current levels.
Additional reporting by Nick Reeve
