Average private market allocations by global institutional investors have risen to 12.5% of overall portfolios, latest research from Aviva Investors shows.
The asset manager's 2026 Private Markets Study surveyed some 500 institutional investors from across the UK and Europe (54% of respondents), North America (18% of respondents) and the Asia-Pacific (28% of respondents), representing $6.5trn (£4.72trn) of assets under management (AUM).
Of the three regions surveyed, North American institutional investors had the highest average allocation to private markets, with 14.4% of overall portfolios invested in such strategies. This compares to 12.1% in Europe and 11.9% in Asia-Pacific.
North American investors also represented the largest year-on-year increase in allocations to private markets across the three regions – rising nearly two percentage points versus last year (12.5%).
The Aviva Investors study also found 88% of global institutional investors plan to increase (49%) or maintain (39%) private markets allocations over the next two years, with 76% expecting private markets to outperform public markets over the next five years.
More than three-quarters (76%) of those surveyed stated "diversification of risk and returns" as being a primary reason for allocating to private markets, alongside "the presence of an illiquidity premium" (55%).
Overall private markets allocation intentions
Source: Aviva Investors Private Markets Study 2026
Aviva Investors head of private markets strategy and research David Hedalen said: "This year's study shows the increasing importance of illiquidity premia as a major factor for investors allocating to private markets, with 55% of global investors viewing it as a driver, up from just 25% in 2023.
"Investors in private markets are increasingly leveraging better data to calibrate models and make more informed decisions and illiquidity premia forms part of this conversation. Becoming more confident in this reward for having increased illiquidity in portfolios will drive investor confidence that these assets can generate improved returns over the long run. We think this helps to explain why it is fast becoming a central pillar for allocating to private markets."
Respondents from all three regions agreed private equity (51%) and infrastructure equity (46%) were the asset classes they expect to deliver strongest risk-adjusted returns over the next five years.
This was followed by private corporate debt in North America (31%) and Europe (34%), with institutional investors and Asia-Pacific instead highlighting real estate equity (32%) as their third-strongest option.
Real estate equity remains the dominant private markets allocation globally, representing 22% of total private markets allocations by institutional investors today. Private equity (21.5%, up from 18.8% in 2024) and private corporate debt (12.5%, up from 10.3%) are the two asset classes that have seen the largest increase in overall allocations since the last edition of the study.
DC allocations
The survey polled both corporate defined benefit investors (24%) and corporate defined contribution (DC) investors (24%) as well as public/government plans, insurance companies and other financial institutions.
Some 72% of DC funds responding to Aviva Investors' study agreed that adding private markets assets to accumulation portfolios would deliver better performance outcomes for members – with European investors being in most agreement (73%).
It found that some 59% of DC funds also agreed there should be more focus on long-term value and less on cost when considering private markets in DC portfolios but only 13% of North American DC funds agreed that private market investment should support economic growth in their home country, versus 52% of European DC funds.
Where DC funds have added private markets assets to their default funds, the research showed that real estate (59%), private debt (48%) and private equity (43%) were the most popular asset classes to have been incorporated.
Pooled fund appetite increases
The study also showed a sharp year-on-year increase in appetite for pooled funds and co-investment – with 58% of respondents favouring single-asset class pooled funds versus 40% last year and 54% stating co-investing is their preferred route to market compared to just 35% last year.
The study found multi-asset pooled funds were the third most popular way of investing in private markets, with 50% of respondents citing this option, a slight increase on 46% last year.
This preference for co-investing was also true for large institutional investors, representing a large shift in sentiment from last year's study.
Some 59% of investors with between $10bn (£7.2bn) and $20bn (£14.5bn) in AUM and 57% of those with $20bn or more in AUM prefer co-investment over other access routes, up from just 25% and 38% respectively last year.
Aviva Investors said that, for the biggest investors, access to larger deals was the biggest attraction (55%), followed by cost reductions (47%), with gaining access to high-quality assets the other key driver (41%).
It said 79% of global investors cited flexibility over contributions and withdrawals and there being no fixed lifespan or deadline for exit as being the biggest perceived benefit of evergreen funds.
Hedalen explained: "Whilst pooled funds remain the most popular access route, our findings also show a marked increase in appetite for co-investment opportunities from institutional investors of all sizes.
"We think this is a significant finding. Not only does it suggest demand for better access to larger opportunities, but it could also highlight the desire to have greater control of portfolios at an asset-specific level and capturing opportunities that allow an increasingly tailored approach to risk and return metrics, liability profiles, as well as other non-financial outcomes, such as regional preferences."
Preferred approaches to accessing private markets
Source: Aviva Investors Private Markets Study 2026
