Important insights for wealth managers: Navigating the complexities of private markets

Private markets have evolved from a niche to a key part of diversified portfolios, attracting wealth managers seeking alternative opportunities beyond traditional assets.
1. Capital deployment is gradual
2. The reality of the J-curve
3. The risk of over-allocation
4. Navigating reporting ‘lags
5. Adopting a programmatic approach
Building a private markets program typically involves investing in new funds annually. This strategy allows wealth managers to access a continuous stream of investment opportunities tailored to specific industries or regions. By regularly committing to new funds, managers can stay aligned with market trends, potentially capture emerging opportunities, and leverage fund managers’ evolving expertise. We assist wealth managers in implementing programmatic investment strategies that balance risk and opportunity, helping ensure diversification across vintage years to minimize exposure to any single economic cycle and seek to enhance long-term portfolio resilience.
By understanding these key aspects of private markets, wealth managers can better navigate this complex landscape and make informed decisions that align with their client’s investment goals.
Global Wealth Manager Proposition Leader, Mercer
Investments Director, Mercer Alternatives
Senior Researcher, Global Wealth Management, Global Strategic Research
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