2026 Market Outlook

Forging Ahead

Private Markets Power Up for a Busy 2026

December 4, 2025 | 11 min read

Macroeconomic twists and turns rightfully put investors on their back foot through much of 2025. While US tariff announcements may have been widely anticipated, their initial levels were not. Nor was the April pause they caused. The second half of the year saw investors reengage as they continued to assess the impact of widespread changes to global trade policies. Private markets were not immune to this volatility, but by H2 picked up where they left off in early 2025 with investment and exit activity rising and dealmaking confidence returning.

GPs and LPs alike have been near-singularly focused on liquidity for a number of years, and that will continue to be overarching theme in 2026. Artificial intelligence’s transformational potential has reached center court and it is expected to drive new transactions across a range of private markets strategies, delivering what could be an unprecedented investment opportunity going forward. Global regulatory changes are continuing to open private markets to more varied pools of investors, including individuals within private wealth and retirement savers. This is sparking further product innovation across the industry that can benefit institutional and retail investors alike.

Overall, financial markets have trended upward and reaction to surprises has dulled but the pink elephants (or black swans) in the room are multiplying for many. Private markets continue to provide not only resilience through turbulence, but also the agility and adaptability needed to capitalize on opportunities stemming from disruption.

Markets keep it moving

After a few months of turmoil, the global economic picture has stabilized. The key question, though, has become how stable is the stability?

In Q3, the OECD revised its 2025 global GDP growth projections upwards by 0.3% from its June forecast, to 3.2%, citing “more resilient global growth” in H1 2025 than anticipated.1 Meanwhile, public stock markets have rebounded from the shock induced by the April 2 trade announcements, with the MSCI World Index reaching all-time highs in 2025, and at the end of Q3 having gained ~17% from the beginning of the year.2 That said, the AI story is embedded in both GDP and public market figures. Without it, the narrative would likely be markedly different.

Interest rates are also trending downward in major economies, with the US Federal Reserve announcing  0.25% cut in September and October3 and the European Central Bank and the Bank of England shaving 0.75%4 and 0.50%5 off rates through 2025, respectively. Against this more positive backdrop, private markets activity has also been building over the past few months. As we anticipated, global private equity’s lower Q2 deal and exit values proved to be short lived. While waiting for the tariff dust clouds to settle, fund managers focused on assessing tariff-related supply issues and future-proofing value in their portfolios.

Through the third quarter of 2025, private equity activity resumed the momentum it built towards the end of 2024 and into the new year. At $595 billion, Q3 global private equity deal value reached its highest level since the 2021 peak, while volumes remained steady.6 The cumulative total value for global buyouts, venture capital, and growth reached $1.15 trillion by Q3 2025, with full-year figures estimated at $1.4 trillion—the highest investment value since 2021.7

Global private equity deal activity regained momentum in Q3

Source: Pitchbook, Q3 2025 Global Private Equity First Look, data as of September 30, 2025.

Long-awaited exit activity also picked up, providing investors with moderately more liquidity. In Q3, global private equity exits registered a 17% increase by number over Q2 totals and a 13% rise over Q1 to reach 1,062.8 Value was also up marginally on the second quarter. There is still some way to go before realizations make a material dent in private equity’s growing portfolio, but estimated total exit value across buyouts, venture capital, and growth for the full year look encouraging with global exit value on pace to reach $1 trillion, an increase of 33% over 2024 figures.9

Global private equity exits rose in Q3

Source: Pitchbook, Q3 2025 Global Private Equity First Look, data as of September 30, 2025.

Fundraising, meanwhile, remains challenging. After several years of lower than anticipated distributions, LPs continue to face liquidity constraints. Between 2015 and 2021, private equity distributed 27% of NAV annually; the rate between 2022 and 2024 was just 14%.10 As a result, buyout, venture capital, and growth funds globally raised just $428 billion through Q3 2025, versus a total of $773 billion for 2024.11 Projections for full-year fundraising across private credit, infrastructure, buyout, venture capital, and growth suggest these asset classes will attract $838 billion by the end of 2025, down 24% from the $1 trillion raised in 2024.12 Should exits continue their momentum and pick up substantially, we would expect fundraising to start recovering later in 2026.

With interest rates and financing costs lower than they have been for several years, the upward trajectory in private markets activity is expected to continue. Even so, downside risks remain. While bilateral talks resulted in the lowering of some tariffs in 2025, the full effects of trade uncertainty may not yet have filtered through to economic data and negotiations are ongoing. Further disruption to institutional norms around the world, including legal challenges to members of the Board of Governors of the Federal Reserve, is ever-present. Geopolitical conflict persists, notwithstanding the Israel-Gaza ceasefire agreement, as fighting continues in Ukraine, global tensions simmer, and civil wars proliferate.

Whether viewed as a positive or a negative, businesses and investors seem to have become accustomed to managing through this new (ab)normal. And AI is expected to continue to change the world, much less the investing game. Fortunately, private markets (with their value-added capital) is where some of the leading managers capitalize on opportunities during change. Durable business models, innovation, and diversification still apply here—and value is being created in every corner of the globe.

Regional updates

North America: Full steam ahead

The US private equity market has largely shrugged off the uncertainties and volatility of the second quarter of 2025 and the shutdown of the US government in Q3, with new deal activity pushing ahead. The third quarter of the year registered a remarkable comeback, resulting in year-to-date value totals already ahead of full-year 2024 figures.13 Deal value in Q3 surged to $331 billion (including late-reporting estimates and unreported deal values), a 28% increase on the previous quarter and a significant 38% rise year over year.14 In terms of deal count, the number of US private equity transactions in the third quarter rose by 3.7% over Q2 and nearly 12% over Q3 2024.15 Of note, Q3 saw, some particularly large deals, including the largest ever buyout: the $55 billion Electronic Arts Inc. (EA) take-private by a consortium of investors including PIF, Silver Lake, and Affinity Partners.16

US private equity dealmaking on the rise

Source: Pitchbook, Q3 2025 US Private Equity First Look, data as of September 30, 2025.

Accommodating debt markets supported the uptick in activity as the broadly syndicated loan market re-emerged in the second half of the year, complementing robust private credit availability. With interest rate cuts in September and October lowering the cost of acquisition finance, plus expectations of more to come over the next few months, we would expect US private equity deal activity to continue accelerating through early 2026, despite the longest US government shutdown in history and no promise it will stay open beyond January 31.

Rising US public markets, with the S&P 500 up by nearly 15% year to date at the time of writing17 and NASDAQ by nearly 20%,18 are also boosting private equity confidence in the US market. Yet, managers are remaining disciplined on valuations. The average US EV/EBITDA buyout multiple for the trailing 12 months to the end of September stood at 12x, down from 12.8x in 2024, and more in line with pre-pandemic levels.19

Optimism has yet to fully filter through to US private equity exit statistics. After a strong start to the year, exit value fell by 41% in Q3 from Q1 figures, to reach $126 billion.20 That said, at $516 billion, the value of US exits through the end of Q3 was already higher than the whole of 2024.21 Exit count for the third quarter was also higher than Q1 2025,22 a positive sign of momentum. And while AI stories like OpenAI and Anthropic have dominated private markets headlines, fintech featured exits through IPOs including Klarna, Chime, and Figure which have stood out in 2025. We expect exit activity to pick up through the remainder of the year and beyond, particularly given the strong pipeline of IPOs in the queue awaiting regulatory approval now that the US government has reopened.23

Mixed picture for US private equity exits

Source: Pitchbook, Q3 2025 US Private Equity First Look, data as of September 30, 2025.

US venture capital deal value showed clear improvement over the past few years, reaching a year-to-date value through Q3 of $250 billion, surpassing full-year 2022 to 2024 totals.24 Much of this investment activity was related to AI and machine learning with some particularly large financings, including Open AI’s $40 billion raise in April from Softbank, a deal that resulted in a post-money valuation of $300 billion for OpenAI.25 Encouragingly, exits also increased in venture, with $75 billion of capital realized in Q3, so far making 2025 the strongest year for US venture capital exits since the high water mark achieved in 2021.26 This tally was boosted by seven companies completing IPOs during Q3, an optimistic sign that startups are beginning to find paths to liquidity again.27

Europe: Tailwinds gather

With the tariff shock in the rearview mirror, Europe’s private markets are moving forward at some pace. Private equity dealmaking in the region accelerated in the third quarter to reach €177 billion, a 25% rise over Q2, with volumes also registering a healthy increase.28 If, as expected, momentum continues through the rest of the year, 2025 is set to be one of Europe’s most active years for new deals, propelled by the region’s lower interest rates and greater acceptance among investors that volatility and uncertainty are here to stay.

A resurgence of megadeals partly explains the rise in 2025 deal values, with transactions valued at €1 billion or more accounting for 32% of the year’s total through Q3.29 This activity was largely driven by take privates of public companies like Darktrace and Hargreaves Lansdown which represented valuation discount opportunities for managers. Nevertheless, private markets firms have long focused on Europe’s middle market, where there are lower requirements for leverage, the paths to growth and value creation are often more visible than in the larger company space, and there are more exit options.

European dealmaking marches on

Source: Pitchbook, Q3 2025 European Private Equity First Look, data as of September 30, 2025.

With major investment announcements in Germany and the UK in areas such as defense, infrastructure, digitalization, and climate, there is a sense of renewed optimism among investors about Europe’s economic prospects and a sense that transformative change is firmly on policymaker agendas. These shifts are increasingly attracting US private markets players looking to diversify outside of their home market. In the first three quarters of 2025, US investors accounted for 38% of Europe’s private equity deal value, up from 31% in 2024.30

New deals are only part of the story. European private equity exits also recorded a significant rise in Q3 2025 with value rising 80% over the previous quarter to €98 billion, and deal count up by 23%.31 The successful IPO of Verisure on October 8, signifies a renewed confidence in the European capital markets. The IPO raised approximately €3.1 billion and valued the company at €13.7 billion, making it the largest private equity-backed IPO in Europe ever and the largest IPO over the past three years.32 The journey of this asset through various stages, most recently as part of a continuation vehicle, is a testament to the potential and resilience of private equity-backed companies in Europe.

Underscoring the importance of Europe’s middle market, exits in the €25 million to €100 million value range increased their share by count, representing 29% of all realizations in the year through Q3.33 There are also signs that momentum is building further in the European exit space to provide much-needed liquidity to LPs. We are aware of several realizations slated for late 2025 and into 2026, including a number of IPOs.

European private equity exits jump

Source: Pitchbook, Q3 2025 European Private Equity First Look, data as of September 30, 2025.

Unsurprisingly, fundraising continues lagging other activity metrics, and we expect that to remain the case in the short term. But lower fundraising coupled with increased investment activity are likely to continue to positively influence the downward trend of dry powder. At a more granular level, the last three years in Europe have shown a flight to quality, and that has crystallized in a few different ways. We have seen several large buyout GPs come back in the market in 2025 (including Advent, Hg, Permira, EQT, among others), but these fundraises will likely continue into 2026.

There is also a continuous fundraising pattern of bifurcation across the lower end of the middle-market with some managers experiencing prolonged fundraising while sought-after groups with consistent and demonstrated outperformance through cycles are continuing to run efficient, oversubscribed fundraises in a matter of months. Based on middle-market dynamics, which are less reliant on IPO markets and have greater flexibility and exit optionality, we have also seen several of the larger GPs taking advantage of the beneficial middle-market exit dynamics by entering the space with new smaller funds—a trend that is likely to continue gaining strength and fueling Europe’s fundraising in 2026 as GPs harness the cross-border growth and consolidation opportunities across the region.

APAC: Gaining further ground

Asia-Pacific’s diverse markets continued to make a significant contribution to global growth through 2025, with GDP growth forecasts for the year uprated by the end of Q3 to 4.5% (from 3.9%),34 and outpacing the global GDP forecast of 3.2%.35 Macro trends of technological innovation and demographic advantages in most markets, such as a rising middle class and large consumer markets, are driving investment flows, including in private markets, where investments, exits, and fundraising all registered year-over-year growth through the first three quarters of 2025.36 We expect the positive momentum to continue into 2026.

At a regional level, Asia continues to pivot toward buyouts, a trend that began in 2023 amid a slowdown in venture funding and deepening buyout opportunities across markets. In developing Asia, such as China, corporations and founders are increasingly exploring buyout options amid tougher operating conditions. With ongoing macro volatility and continued tariff uncertainty, managers are expected to favor domestic-facing businesses over export-oriented sectors in the near term, with deals such as Boyu’s acquisition of Starbucks China representative of the region’s defining buyout deals.

Investment activity across the region has stabilized since 2023, with Q3 2025 year-to-date activity registering $75 billion, a 26% year-over-year gain despite continuing global macro volatility. Annual pacing remains steady at approximately $100 billion, reinforcing the region’s resilience. India leads the region, contributing 34% of total investment activity and posting 73% year-over-year growth through the third quarter, driven by large minority growth transactions and increasing middle-market buyout opportunities. Japan also stands out, contributing 29% of total investment activity and delivering 155% year-over year growth for Q3 2025 year to date.37 Looking ahead, we expect India and Japan to retain their leading positions in 2026, supported by structural tailwinds and increasingly mature private equity ecosystems.

Of note in 2025, Japan led several of Asia’s largest transactions, including a number of multi-billion-dollar deals. Of the five largest deals in Asia in 2025, year to date, four were from Japan, including two take-privates and two carve-outs. Bain Capital’s ¥810 billion (US$5.5 billion) acquisition of York Holdings from Seven & i Holdings represents the largest consumer carve-out deals in Japan’s history.38 This was a highly complex transaction where 29 subsidiaries were carved out from a listed corporate entity and consolidated under a single platform. The deal highlights the ongoing trend of Japanese-listed conglomerates, under increasing pressure from public investors, selling off non-core, underutilized assets to focus on their primary businesses.

Positive momentum for APAC dealmaking (Transaction value )*

Source: AVCJ, APER, supplemented by HarbourVest analysis of other activity in the market, as of September 30, 2025. Past performance is not a reliable indicator of future results.

*Excludes investments by sovereign wealth funds, RMB funds and other non-PE financial investors.

Exit activity across Asia continues to recover and is on track to surpass the prior two years. Year-to-date exits across the region through September reached $54 billion, up 28% year over year and already 90% of full-year 2024 levels.39 India and Japan remain the region’s leading exit markets, accounting for approximately 60% of total activity. India led with $19 billion in exits, driven by a balanced mix of trade sales and public market transactions. The key storyline for India though, is the emergence of the IPO market and deepening of the public market which is backed by domestic capital, making it far less vulnerable to foreign capital and foreign investor pull-backs—a trend we believe is likely to continue.

Japan has also meaningfully contributed to the exit momentum with $12 billion of exits primarily concentrated in large strategic exits led by domestic corporates and pan-regional financial investors.40 Corporate reform is driving the motivation for local strategic buyers to be acquisitive in an effort to show growth and put cash to work.

China also saw green shoots in liquidity with select large M&A exits, secondary stake sales, and public market sell-downs of listed positions to provide interim liquidity to LPs, with market defining deals such as PAG’s exit of Yingde Gases and Bain’s partial exit of Chindata. Korea ($6.1 billion) and Australia ($5.5 billion) each contributed ~10% to total exits, with trade sales dominating.41 Southeast Asia on the other hand remained subdued, underscoring persistent liquidity challenges.

Looking ahead, M&A and sponsor-to-sponsor sales are expected to remain the primary exit routes, though IPO pipelines in Hong Kong and India are gaining momentum with several sizable listings anticipated in late 2025 and into 2026. Meanwhile, in venture capital, we are seeing more managers exploring secondary stake sales to generate interim liquidity for LPs.

APAC private equity-backed exits accelerate *

Source: AVCJ, APER, supplemented by HarbourVest analysis of other activity in the market, data as of September 30, 2025. Past performance is not a reliable indicator of future results. For illustrative purposes only.

* Excludes exits by sovereign wealth funds, RMB funds, and other non-PE financial investors.

Anchored by large pan-regional funds, Asia private equity fundraising reached $41 billion by the end of Q3 2025—up 73% year-over-year and already surpassing the prior two years.42 Most markets recorded year-over-year growth, except Japan, which moderated following a record-setting 2024.43 In China, USD-denominated fundraising remains challenging; however, select venture managers, particularly those with strengths in AI and deep tech, have cautiously re-entered the market, raising smaller and more disciplined fund sizes. Looking ahead, fundraising in 2026 is expected to remain strong, once again led by pan-regional funds and an upswing in middle-market fundraises, particularly in Japan and Australia.

With the macro picture looking somewhat brighter than even just a few months ago, there are signs that the trough is behind, and brighter horizons are ahead (barring any new exogenous shocks). That said, the themes in private markets remain relatively unchanged.

Trend 1: Liquidity still front and center

Avenues to liquidity are again top of mind for private markets fund managers and their LPs. In fact, for some LPs the need for liquidity can transcend pricing. But in a recent survey of private equity executives, nearly two-thirds (65%) said the valuation gap had narrowed over the past 12 months—a significant shift from recent years when a prior survey found that valuation mismatches were the greatest obstacle to dealmaking.44 This market and sentiment reset will help to drive further liquidity. We see signs that sponsors are now more willing to sell companies in a bid to lock in distributions to investors, as opposed to holding out for maximum valuations. This is a move that many LPs will appreciate per a survey earlier this year that found 63% of LPs prefer conventional exits as a source of liquidity, and at a discount if necessary.45

GPs also remain under pressure to do deals, given the continued aging of private markets’ portfolios and the difficulties LPs have faced in committing to new funds as capital returned has not kept pace with the high level of investment made in the run-up to 2022. Global buyout portfolios, for example, have continued to grow by both number and unrealized value, with median holding periods for exits from the portfolio standing at 6.1 years at the end of 2024,46 and a third of private equity-backed company inventory is more than seven years old.47

PE-backed company inventory ages

Source: HarbourVest analysis based on PitchBook data as of June 30, 2025.

The good news is that many of the more conventional routes are firing back to life. This year has already seen some improvement in exit numbers globally, even with the tariff-induced Q2 pause in activity and the government shutdown in the US, and we expect this to accelerate through the year. In some markets, exits via IPO have stepped up considerably. In US stock markets, for example, there were 297 IPOs by the end of October 2025, a nearly 60% increase over 2024 totals for the same 10-month period,48 with more public listings slated for late 2025 and into 2026. Private equity firms globally are taking advantage of strong appetite for new listings. In the first nine months of 2025, the number of private equity-backed IPOs increased by 159% year over year, while proceeds rose by 68%.49 With strong aftermarket performance for many of these private equity-backed IPOs,50 there is reason to believe that the window will open further through 2026.

Sponsor-to-sponsor exit activity has also picked up as lower cost debt following interest rate cuts supports private market acquisitions. In Europe, sales to sponsors remain the dominant exit route.51 In the US, this exit route had already surpassed full-year 2024 value totals by Q3 2025,52 and in Asia-Pacific, volumes of sponsor-to-sponsor exits are growing as the market matures and larger pan-Asian funds experience capital raising success.

Even as conventional exits return, the secondaries market should continue to play a vital role in delivering liquidity to LPs across the spectrum of private equity, private credit, and infrastructure. The first half of 2025 saw record secondary transaction volume of $103 billion, a 51% increase over H1 2024. With projections of a full-year total exceeding $210 billion,53 there is no sign of activity slowing down any time soon.

Secondaries activity continues to set records

Source: Jefferies Private Capital Advisory, H1 2025 Global Secondary Market Review (July), data as of June 30, 2025.

In LP-led secondary transactions, a desire for liquidity will continue to drive sales, but portfolio rebalancing and administrative clean-up will also bring sellers to the market, especially among the rising tally of investors with mature portfolios. LPs are also increasingly taking advantage of secondary market innovations beyond vanilla portfolio sales, often to benefit from potential upside, with structures such as NAV loans, preferred equity, managed funds, and collateralized fund obligations finding favor.54

Now an established part of the liquidity toolkit, GP-led transactions and private equity continuation vehicles (PECs) will also feature heavily in the market in the year to come and beyond. These transactions are increasing in diversity, with continuation vehicles containing private credit and infrastructure as well as private equity assets, providing LPs with liquidity options while allowing GPs to hold on to prized assets for longer. Private credit, in particular, is expected to see significant growth in GP-led transactions as the underlying market has grown and larger portfolios are coming to market. By the end of H1 2025, private credit GP-led deals made up less than a third of credit secondaries, but this share is projected to rise to ~50% by the end of the year.55

Trend 2: AI is the real deal

The AI innovation cycle may be relatively nascent, but it is already fundamentally reshaping economies and investment flows. Given the seismic nature of the changes afoot, significant investment will continue to flow from all branches of private markets, from infrastructure and private equity to private credit and venture capital, to capitalize on what may be an unprecedented opportunity.

In this shifting paradigm, both public and private companies are looking to private equity, growth capital, and venture capital to support their AI strategies. Thoma Bravo’s $12.3 billion take-private of human capital SaaS business Dayforce in August is a case in point, with part of the deal’s rationale being to accelerate its AI capabilities in the faster decision-making environment of private markets.56 At Intel, restructuring efforts to improve profitability and raise capital to win new clients in the AI age led to the sale of a majority stake in programmable chip business Altera for $8.75 billion to Silver Lake.57 We believe take-private and carve-out strategies will continue as businesses come under pressure to articulate and implement a playbook that capitalizes on AI transformation.

AI investable universe

Fintech

AI investable universe

IT and cybersecurity

AI investable universe

SaaS

AI investable universe

Infrastructure and energy

AI investable universe

Healthcare / Life sciences

AI investable universe

Retail / eCommerce

AI investable universe

Data centers

AI investable universe

Non-AI business growth from use of AI

AI investable universe

Source: HarbourVest. For illustrative purposes only.

But what is the AI investable universe? Of course, AI will continue to present significant investment opportunities for venture capital. We are already starting to see that wave build and by the end of Q3 2025, AI startups attracted a record $193 billion of funding accounting for over half of all venture capital investment value globally, and 30% based on deal count.58

As the infrastructure underpinning meets rising AI adoption, data centers are naturally attracting attention. Recent studies estimate that hyperscalers’ investment in 2025 and 2026 could eclipse $1 trillion59 and up to $7 trillion of investment will be needed through 2030 to keep pace with the data center demand for compute power.60

AI is expected to drive significant investment in data centers

Global data center total capital expenditures driven by AI,
by category and scenario, 2025-2030 projection

Note: Figures may not sum to totals, because of rounding.

1Excludes IT services and software (e.g., operating system, data center infrastructure management), since they require relatively low capex compared with other components.

2Includes servers, storage, and network infrastructure. IT capex also accounts for replacing AI accelerators every 4 years.

3Assumes $2.2 billion-$3.2 billion/gigawatt (including power generation and transmission cost) to account for a range of power generation scenarios (e.g., fully powered by gas, a combination of gas power and storage, and solar) and regional cost differences. Distribution cost is neglected, as most AI centers are expected to be >50 megawatt scale and connected to a transmission grid.

Source: McKinsey Data Center Capex TAM Model; McKinsey Data Center Demand Model

Data center investment is already fueling opportunities in all private markets segments. With such high investment needs, capital from across the risk-return spectrum is being drawn into the development of greenfield sites as well as into managing already operational brownfield assets to meet growing demand. And it’s not just the data centers themselves—there is a wide ecosystem around these assets, from energy and power to AI computing and water for cooling.

This is leading to major partnerships, including joint ventures between public companies and private capital. Meta, for example, recently agreed to a $27 billion financing deal with Blue Owl Capital to fund the development of its giant Hyperion data center project in Louisiana.61 Meanwhile, BlackRock has assembled a public-private markets collaboration under the AI Infrastructure Partnership which includes its own infrastructure arm, Global Infrastructure Partners, plus Microsoft, NVIDIA, MGX, and xAI. In October, this partnership announced the largest data center deal to date, with a $40 billion acquisition of Macquarie-backed Aligned Data Centers.62 Even startups are now involved in building data center infrastructure. Crusoe, for example, is a venture capital-backed business designing and constructing data centers for giants including OpenAI, Oracle, and Microsoft via the Stargate platform.63

There is clear private markets opportunity across all these sectors. Yet we’ve also recently seen some warnings from some regulators and executives about the risk of an AI bubble. AI-related valuations are high and there is significant capital going into the technology, including the applications and infrastructure required. Similar to previous innovation cycles, potential obsolescence risk and disruption is present should new developments lead to more efficient compute capacity. However, as the data center chart above demonstrates, even in a more constrained momentum scenario, there is still a need for $3.7 trillion of investment in the next few years. If there turns out to be an oversupply in the short-run, demand is likely to rise over the coming years to meet it.

As history has taught us, we expect there to be some volatility and swings as supply and demand adjust. We saw this with the roll-out of fiber and the early days of the internet. Seasoned investors must pick their spots with care and perform judicious due diligence. We believe the winners in the AI race will be comprised of companies with sound and differentiated products and business models, along with disruptors capable of bringing distinct transformation, efficiencies, and compute power to AI’s key verticals and sectors.

Trend 3: Private markets in all the places

As the pace of change picks up across economies, innovation in private markets is also accelerating. This is positioning private markets to be a durable source of excess returns for both existing and new and different types of investors.

With public market valuations continuing to climb in the last several years—to what many consider an overvaluation readying for correction over the next 12-24 months—the shorter-term performance of public markets has exceeded the private markets benchmark. However, the long-term nature of private markets and their performance benefits are on full display below with both the 5- and 10-year trailing returns of private equity buyouts outperforming the MSCI ACWI Investable Market Index (MSCI ACWI). Notably, the 10-year trailing return of private equity buyouts has outperformed public markets by more than 3% on an annualized basis when measured against the MSCI ACWI.64

Source: The HV PE Benchmarks reflect a compilation of PE partnership and transactional data drawn from internal and external sources and related estimated valuations of such companies by HarbourVest for the illustrated period (which in turn are based on HarbourVest’s subjective assumptions).  The HV PE Benchmarks represent net performance based on fees and expenses assumptions of 1.50% annualized fee and 15% effective carried interest. The actual fees and expenses applicable to the underlying investments included in the HV PE Benchmarks may be materially higher than the assumed fees and expenses, which would lower the returns. Past performance is not indicative of future results.

At the same time, public markets have become increasingly concentrated, with the top 10 S&P 500 companies accounting for more than a third of the index’s market capitalization,65 a trend that increasingly places the traditional 60/40 public markets portfolio at risk to market dislocation. In contrast, the universe of private companies has expanded offering a varied and deep pool of investment opportunities. In the US, the number of private equity-backed companies has risen by more than 400% in the past 25 years to 11,500 while the number of US listed business has shrunk by 35% to 4,500.66

It is therefore unsurprising that individual investors are increasingly turning to private markets exposure to diversify their portfolios and gain access to outperformance potential. And while the numbers vary widely across sources, reasonable expectations estimate individual investors account for ~$2.7 trillion, or one-fifth, of the $14 trillion in private markets AUM today, but that share is projected to rise to 37% within five years as access to private markets investing deepens across financial advisors and retail wealth channels.67

Demand for private markets is growing from retirement savers too, especially as defined contribution plan assets under management continue to swell. In the US, the Trump administration issued an executive order in August outlining plans that pave the way for private markets investments to be included in 401(k) investment plans.68 This is a major opportunity, not just for private markets, but also for everyday investors seeking structural flexibility with new products, greater diversification, and outperformance potential with longer-term resilience. Similar policy objectives are taking root in other markets as well, including Latin America and the UK. In the UK specifically, the Mansion House Accord, most recently amended in 2025, saw workplace pension providers—including both defined benefit and defined contribution schemes—pledge to invest at least 10% of assets in UK infrastructure, property, and private equity by 2030.69

Private markets firms are responding to rising demand from an increasingly diverse set of investors with varying needs and objectives by creating innovative products. Some form of periodic liquidity, the structural tax reporting advantages, plus the simplicity of making single investments (as opposed to being required to meet drawdown commitments) are particularly valued by individual investors and smaller institutional investors. Private markets managers are offering an ever-expanding range of options to meet these needs, including open-ended vehicles, semi-liquid evergreen structures, and private markets strategies rolled into ETFs.

These products are proving popular across a range of investors, with evergreen vehicles reaching an AUM of $427 billion by the end of 2024.70 Yet even conservative projections are penciling in further rapid growth of ~20% a year, with the product suite set to surpass the $1 trillion AUM mark by 2029.71

Evergreen structures are set for rapid growth

Source: Pitchbook Newsletter, Forecasting the Growth of Wealth-Focused Evergreen Funds, May 14,2025, Geography US and Europe.

We would expect private markets to continue opening up to a range of new investors seeking diversification beyond highly concentrated public markets. Investors of all types can now choose from a range of vehicle types with differing minimum investment amounts and liquidity profiles to meet their requirements. These vehicle options are also increasingly being offered across a range of asset classes including secondaries, private equity, private credit, and infrastructure. With policy tailwinds and rising demand for private markets exposure, fund managers will continue innovating to help investors achieve their diversification, liquidity, and return objectives.

Conclusion: Opportunity ahead

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As 2025 closes, we are optimistic for a promising year ahead. In particular, we anticipate that liquidity will improve at long last as exits start to come through more meaningfully, and as the secondary market continues to provide capital and innovative structures for both GPs and LPs. As more capital flows back to LPs, we also expect fundraising to pick up over the course of 2026.

There is certainly plenty of risk remaining. Despite more upbeat global GDP growth estimates for 2025 than expected six months ago, the effects of tariffs may not have worked fully through the economy. And geopolitical conflicts remain, along with the uncertainty of whether AI technologies will deliver on their potential. But we are confident that private markets will continue to adapt and evolve to find opportunities while also managing potential risks on behalf of their growing and increasingly diverse investor base. The industry, and our firm, are actively striving to provide investors with optionality, greater customization, and more ways to align investments with their long-term goals—meeting clients and investors where they are and innovating to meet their needs in a changing landscape.

In times such as these, we believe that firms with the right technology and data to inform decisions will be those most capable of embracing emerging trends across key sectors. Today’s market requires agility, long-held experience through cycles, a strong capacity for innovation, and strategic foresight to navigate the more complex and exciting conditions that lie ahead.

Footnotes
  1. OECD Economic Outlook, Interim Report: Finding the Right Balance in Uncertain Times, September 2025.
  2. MSCI World Index, YTD return as of September 30, 2025.
  3. Federal Reserve Board. “Federal Reserve Issues FOMC Statement,” Press Release, October 29, 2025.
  4. European Central Bank. “Key ECB Interest Rates,” June 11,2025.
  5. Bank of England, “Monetary Policy,” November 6, 2025.
  6. Pitchbook, Q3 2025 Global Private Equity First Look, data as of September 30, 2025.
  7. HarbourVest analysis based on PitchBook, data as of September 30, 2025.
  8. HarbourVest analysis based on PitchBook, data as of September 30, 2025.
  9. HarbourVest analysis based on PitchBook, data as of September 30, 2025.
  10. HarbourVest analysis based on PitchBook, data as of September 30, 2025.
  11. HarbourVest analysis based on PitchBook, data as of September 30, 2025.
  12. HarbourVest analysis based on PitchBook, data as of September 30, 2025.
  13. PitchBook, Q3 2025 US PE Breakdown, data as of September 30, 2025.
  14. PitchBook, Q3 2025 US PE Breakdown, data as of September 30, 2025.
  15. PitchBook, Q3 2025 US PE Breakdown, data as of September 30, 2025.
  16. Forbes, Videogame Juggernaut Electronic Arts Gets Acquired for $55 billion, September 29, 2025.
  17. S&P Dow Jones Indices. “S&P 500,” data as of September 30, 2025.
  18. Nasdaq. “Nasdaq Composite Index,” data as of September 30, 2025.
  19. PitchBook, Q3 2025 US PE Breakdown, data as of September 30, 2025.
  20. PitchBook, Q3 2025 US PE Breakdown, data as of September 30, 2025.
  21. PitchBook, Q3 2025 US PE Breakdown, data as of September 30, 2025.
  22. PitchBook, Q3 2025 US PE Breakdown, data as of September 30, 2025.
  23. Reuters, US government shutdown threatens to disrupt IPO market momentum, Manya Saini and Nicket Nishant, October 1, 2025.
  24. PitchBook, Q3 2025 NVCA Venture Monitor, data as of September 30, 2025.
  25. CNBC, OpenAI closes $40 billion funding round, largest private tech deal on record, Hayden Field and Kate Rooney, March 31, 2025, Updated April 1, 2025.
  26. PitchBook, Q3 2025 NVCA Venture Monitor, data as of September 30, 2025.
  27. PitchBook, Q3 2025 NVCA Venture Monitor, data as of September 30, 2025.
  28. Pitchbook, Q3 2025 European PE Breakdown, data as of September 30, 2025.
  29. Pitchbook, Q3 2025 European PE Breakdown, data as of September 30, 2025.
  30. PitchBook, Q3 2025 European PE Breakdown, data as of September 30, 2025.
  31. PitchBook, Q3 2025 European PE Breakdown, data as of September 30, 2025.
  32. Latham & Watkins News, Latham & Watkins Advises Verisure on €13.7 Billion IPO, October 8, 2025.
  33. Pitchbook, European PE Breakdown, Q3 2025, data as of September 30, 2025.
  34. IMF, Regional Economic Outlook for Asia and Pacific, October 2025.
  35. International Monetary Fund, World Economic Outlook, October 2025.
  36. Source: AVCJ, APER, supplemented by HarbourVest analysis of other activity in the market, data as of September 30, 2025.
  37. Source: AVCJ, APER, supplemented by HarbourVest analysis of other activity in the market, data as of September 30, 2025.
  38. Reuters, Bain Capital to sell China data centre business likely valued at over $4 billion, Kane Wu, May 9, 2025.
  39. Source: AVCJ, APER, supplemented by HarbourVest analysis of other activity in the market, data as of September 30, 2025.
  40. Source: AVCJ, APER, supplemented by HarbourVest analysis of other activity in the market, data as of September 30, 2025.
  41. Source: AVCJ, APER, supplemented by HarbourVest analysis of other activity in the market, data as of September 30, 2025.
  42. Source: AVCJ, APER, supplemented by HarbourVest analysis of other activity in the market, data as of September 30, 2025.
  43. Source: AVCJ, APER, supplemented by HarbourVest analysis of other activity in the market, data as of September 30, 2025.
  44. EY, Private Equity Pulse: key takeaways from Q3 2025, October 2025.
  45. Bain & Company, Private Equity Midyear Report 2025, June 2025.
  46. Bain & Company, Private Equity Outlook 2025, Is a Recovery Starting to Take Shape, December 2024.
  47. HarbourVest analysis based on PitchBook data as of June 30, 2025.
  48. stockanalysis.com, data as of October 31, 2025.
  49. EY Global IPO Trends, Q3 2025, September 30, 2025.
  50. EY Global IPO Trends, Q3 2025, September 30, 2025.
  51. PitchBook, Q3 2025 European PE Breakdown, data as of September 30, 2025.
  52. PitchBook, Q3 2025 US PE Breakdown, data as of September 30, 2025.
  53. Jefferies Private Capital Advisory, H1 2025 Global Secondary Market Review (July), data as of June 30, 2025.
  54. Jefferies Private Capital Advisory, H1 2025 Global Secondary Market Review (July), data as of June 30, 2025.
  55. Jefferies Private Capital Advisory, H1 2025 Global Secondary Market Review (July), data as of June 30, 2025.
  56. Thoma Bravo Press Release, Dayforce Enters into US$12.3 Billion Definitive Agreement with Thoma Bravo to Become a Private Company, August 21, 2025.
  57. Intel, Press Release: Strategic Investment by Sliver Lake, April 2025.
  58. Pitchbook, Q3 2025 Global VC First Look, data as of September 30, 2025.
  59. S&P Global, Power Update: A Surging Data Center Tide Lifts the Power Sector, October 7, 2025.
  60. McKinsey & Company, The Cost of Compute: A $7 Trillion Dollar Race to Scale Data Centers, April 28, 2025.
  61. Meta, Meta and Blue Owl Capital to Develop Hyperion Data Center, October 1, 2025.
  62. Macquarie, Macquarie Asset Management and PSP Investments Announce Sale of AirTrunk, September 4, 2024.
  63. Forbes, Meet the Tiny Startup Building Stargate, OpenAI’s $500 Billion Data Center Moonshot, Christopher Helman and Rashi Shrivastava, April 10, 2025.
  64. HarbourVest investment, monitoring, and due diligence activities, data as of June 30, 2025.
  65. Barclays Private Bank, Market Concentration: Is It Really an Issue?, data as of September 9, 2025.
  66. Citizens Bank Corporate Insights, The public to private equity pivot continues, December 2024.
  67. businesswire.com, Adams Street’s 2025 Advisor Outlook Highlights Rising Demand for Access to Private Markets, April 15, 2025.
  68. White House, Democratizing Access to Alternative Assets for 401(k) Investors, August 2025.
  69. UK Government, Pension Schemes Back British Growth, May 13, 2025.
  70. Pitchbook Newsletter, Forecasting the Growth of Wealth-Focused Evergreen Funds, May 14,2025, Geography US and Europe.
  71. Pitchbook Newsletter, Forecasting the Growth of Wealth-Focused Evergreen Funds, May 24, 2025, Geography US and Europe.
Disclosure

Diversification does not ensure a profit or protect against a loss.

HarbourVest Partners, LLC is a registered investment adviser under the Investment Advisers Act of 1940. This material is solely for informational purposes and should not be viewed as a current or past recommendation or an offer to sell or the solicitation to buy securities or adopt any investment strategy.  The opinions expressed herein represent the current, good faith views of the author(s) at the time of publication, are not definitive investment advice, and should not be relied upon as such. This material has been developed internally and/or obtained from sources believed to be reliable; however, HarbourVest does not guarantee the accuracy, adequacy or completeness of such information. There is no assurance that any events or projections will occur, and outcomes may be significantly different than the opinions shown here.  This information, including any projections concerning financial market performance, is based on current market conditions, which will fluctuate and may be superseded by subsequent market events or for other reasons. The information contained herein must be kept strictly confidential and may not be reproduced or redistributed in any format without the express written approval of HarbourVest.

Nothing herein should be construed as a solicitation, offer, recommendation, representation of suitability, legal advice, tax advice, or endorsement of any security or investment and should not be relied upon by you in evaluating the merits of investing in HarbourVest funds or in any other investment decision.

The general partners and/or companies mentioned in this report are intended for illustrative purposes only. A reference to a specific General Partner does not constitute a recommendation to invest nor an indication that HarbourVest funds or accounts hold any specific General Partner

HarbourVest Private Equity Benchmarks (“HV PE Benchmarks”). Market analysis is not representative of any HarbourVest product. The HV PE Benchmarks reflect a compilation of PE partnership and transactional data drawn from internal and external sources and related estimated valuations of such companies by HarbourVest for the illustrated period (which in turn are based on HarbourVest’s subjective assumptions).  The HV PE Benchmarks represent net performance based on an all-in fees and expenses assumption of 500 basis points. The actual fees and expenses applicable to the underlying investments included in the HV PE Benchmarks may be materially higher than the assumed fees and expenses, which would lower the returns. The HV PE Benchmarks data universe information has been developed internally based on information obtained from sources believed to be reliable; however, HarbourVest does not guarantee the accuracy, adequacy or completeness of such information or HarbourVest’s related valuation estimates or assumptions, which may be materially inaccurate.  The HV PE Benchmarks are intended to be representative of the broader PE market and do not reflect any views, analysis, or recommendation by HarbourVest with respect to any particular investment and are not representative of the investment performance of any HarbourVest investment or the experience of any investor in any HarbourVest product. Past performance is not indicative of future results.

Definitions:

Bloomberg is the source of the index data contained or reflected in this material. MSCI, S&P, FTSE Russell, and JP Morgan are the owners of the index data contained or reflected in this material and all trademarks and copyrights related thereto. This is HarbourVest’s presentation of the data. Bloomberg, MSCI, S&P, FTSE Russell, and JP Morgan are not responsible for the calculations conducted by HarbourVest, the formatting or configuration of this material, or for any inaccuracy in presentation thereof.

The MSCI AC World® Index (ACWI) is designed to measure the performance of publicly-traded large and mid-capitalization equity securities in global developed and emerging markets. The MSCI ACWI Index is maintained by Morgan Stanley Capital International (“MSCI”) and has historically captured approximately 85% coverage of the free float-adjusted market capitalization of its publicly-traded global equity opportunity set.  

The S&P 500® Index is designed to measure the performance of publicly-traded equity securities of the large capitalization sector of the US market and includes 500 large companies having common stock listed on eligible U.S. exchanges. The S&P 500 Index is maintained by Standard & Poors (“S&P”) and has historically captured approximately 80% coverage of available market capitalization of publicly-traded equities in the US market.  

The Russell 2000® Index is designed to measure the performance of publicly-traded equity securities of the small capitalization sector of the US market and includes the 2,000 smallest companies in the Russell 3000® Index. These indexes are maintained by FTSE Russell, a subsidiary of the London Stock Exchange Group. The Russell 3000 Index consists of the 3,000 largest publicly-listed US companies, and has historically captured approximately 98% coverage of the total capitalization of the entire US stock market.  

The Nasdaq Composite is a market cap-weighted index, simply representing the value of all listed stocks on the NASDAQ exchange. The set of eligible securities includes common stocks, ordinary shares, and common equivalents such as ADRs.

MSCI Private Capital Solutions (f.k.a. Burgiss Private Index Data) (unless otherwise indicated) reflects the fees, carried interest, and other expenses of the funds included in the benchmark. Please note that Fund returns would be reduced by the fees, carried interest, and other expenses borne by investors in the Fund. Such fees, carried interest, and other expenses may be higher or lower than those of the funds included in the benchmark. Certain information contained herein (the “Information”) is sourced from/copyright of MSCI Inc., MSCI ESG Research LLC, or their affiliates (“MSCI”), or information providers (together the “MSCI Parties”) and may have been used to calculate scores, signals, or other indicators. The Information is for internal use only and may not be reproduced or disseminated in whole or part without prior written permission. The Information may not be used for, nor does it constitute, an offer to buy or sell, or a promotion or recommendation of, any security, financial instrument or product, trading strategy, or index, nor should it be taken as an indication or guarantee of any future performance. Some funds may be based on or linked to MSCI indexes, and MSCI may be compensated based on the fund’s assets under management or other measures. MSCI has established an information barrier between index research and certain Information. None of the Information in and of itself can be used to determine which securities to buy or sell or when to buy or sell them. The Information is provided “as is” and the user assumes the entire risk of any use it may make or permit to be made of the Information. No MSCI Party warrants or guarantees the originality, accuracy and/or completeness of the Information and each expressly disclaims all express or implied warranties. No MSCI Party shall have any liability for any errors or omissions in connection with any Information herein, or any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages.

The HarbourVest U.S. Buyout Benchmark seeks to measure the performance, net of fund fees, expenses and carried interest, of buyout investments made by private equity funds in private companies that are based in the United States.

The HarbourVest U.S. Venture Benchmark seeks to measure the performance, net of fund fees, expenses and carried interest, of seed, early stage, late stage, and growth equity investments made by venture capital funds in private companies that are based in the United States.

The HarbourVest Global ex-US Buyout Benchmark seeks to measure the performance, net of fund fees, expenses and carried interest, of buyout investments made by private equity funds in private companies globally, including developed and emerging markets, excluding companies based in the United States.

The HarbourVest Europe Buyout Benchmark seeks to measure the performance, net of fund fees, expenses and carried interest, of buyout investments made by private equity funds in private companies that are based in Western and Eastern Europe and the Nordics.

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Professional Investor Definition

“Professional Investor” under the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong) (the “SFO”) and its subsidiary legislation) means:

(a) any recognised exchange company, recognised clearing house, recognised exchange controller or recognised investor compensation company, or any person authorised to provide automated trading services under section 95(2) of the SFO;

(b) any intermediary, or any other person carrying on the business of the provision of investment services and regulated under the law of any place outside Hong Kong;

(c) any authorized financial institution, or any bank which is not an authorised financial institution but is regulated under the law of any place outside Hong Kong;

(d) any insurer authorized under the Insurance Ordinance (Cap. 41 of the Laws of Hong Kong), or any other person carrying on insurance business and regulated under the law of any place outside Hong Kong;

(e) any scheme which-

(i) is a collective investment scheme authorised under section 104 of the SFO; or

(ii) is similarly constituted under the law of any place outside Hong Kong and, if it is regulated under the law of such place, is permitted to be operated under the law of such place,

or any person by whom any such scheme is operated;

(f) any registered scheme as defined in section 2(1) of the Mandatory Provident Fund Schemes Ordinance (Cap. 485 of the Laws of Hong Kong), or its constituent fund as defined in section 2 of the Mandatory Provident Fund Schemes (General) Regulation (Cap. 485A of the Laws of Hong Kong), or any person who, in relation to any such registered scheme, is an approved trustee or service provider as defined in section 2(1) of that Ordinance or who is an investment manager of any such registered scheme or constituent fund;

(g) any scheme which-

(i) is a registered scheme as defined in section 2(1) of the Occupational Retirement Schemes Ordinance (Cap. 426 of the Laws of Hong Kong); or

(ii) is an offshore scheme as defined in section 2(1) of that Ordinance and, if it is regulated under the law of the place in which it is domiciled, is permitted to be operated under the law of such place,

or any person who, in relation to any such scheme, is an administrator as defined in section 2(1) of that Ordinance;

(h) any government (other than a municipal government authority), any institution which performs the functions of a central bank, or any multilateral agency;

(i) except for the purposes of Schedule 5 to the SFO, any corporation which is-

(i) a wholly owned subsidiary of-

(A) an intermediary, or any other person carrying on the business of the provision of investment services and regulated under the law of any place outside Hong Kong; or

(B) an authorized financial institution, or any bank which is not an authorised financial institution but is regulated under the law of any place outside Hong Kong;

(ii) a holding company which holds all the issued share capital of-

(A) an intermediary, or any other person carrying on the business of the provision of investment services and regulated under the law of any place outside Hong Kong; or

(B) an authorized financial institution, or any bank which is not an authorised financial institution but is regulated under the law of any place outside Hong Kong; or

(iii) any other wholly owned subsidiary of a holding company referred to in subparagraph (ii); or

(j) any person of a class which is prescribed by rules made under section 397 of the SFO for the purposes of this paragraph as within the meaning of this definition for the purposes of the provisions of the SFO, or to the extent that it is prescribed by rules so made as within the meaning of this definition for the purposes of any provision of the SFO.

The first of such classes of additional “professional investor”, under the Securities and Futures (Professional Investor) Rules (Cap. 571D of the Laws of Hong Kong), are:

(k) any trust corporation (registered under Part VIII of the Trustee Ordinance (Cap. 29 of the Laws of Hong Kong) or the equivalent overseas) having been entrusted under the trust or trusts of which it acts as a trustee with total assets of not less than HK$40 million or its equivalent in any foreign currency at the relevant date (see below) or-

(i) as stated in the most recent audited financial statement prepared-

(A) in respect of the trust corporation; and

(B) within 16 months before the relevant date;

(ii) as ascertained by referring to one or more audited financial statements, each being the most recent audited financial statement, prepared-

(A) in respect of the trust or any of the trust; and

(B) within 16 months before the relevant date; or

(iii) as ascertained by referring to one or more custodian (see below) statements issued to the trust corporation-

(A) in respect of the trust or any of the trusts; and

(B) within 12 months before the relevant date;

(l) any individual, either alone or with any of his associates (the spouse or any child) on a joint account, having a portfolio (see below) of not less than HK$8 million or its equivalent in any foreign currency at the relevant date or-

(i) as stated in a certificate issued by an auditor or a certified public accountant of the individual within 12 months before the relevant date; or

(ii)  as ascertained by referring to one or more custodian statements issued to the individual (either alone or with the associate) within 12 months before the relevant date;

(m) any corporation or partnership having-

(i) a portfolio of not less than HK$8 million or its equivalent in any foreign currency; or

(ii) total assets of not less than HK$40 million or its equivalent in any foreign currency, at the relevant date, or as ascertained by referring to-

(iii) the most recent audited financial statement prepared-

(A) in respect of the corporation or partnership (as the case may be); and

(B) within 16 months before the relevant date; or

(iv) one or more custodian statements issued to the corporation or partnership (as the case may be) within 12 months before the relevant date; and

(n) any corporation the sole business of which is to hold investments and which at the relevant date is wholly owned by any one or more of the following persons-

(i) a trust corporation that falls within the description in paragraph (k);

(ii) an individual who, either alone or with any of his or her associates on a joint account, falls within the description in paragraph (k);

(iii) a corporation that falls within the description in paragraph (m);

(iv) a partnership that falls within the description in paragraph (m).

For the purposes of paragraphs (k) to (n) above:

  • “relevant date” means the date on which the advertisement, invitation or document (made in respect of securities or structured products or interests in any collective investment scheme, which is intended to be disposed of only to professional investors), is issued, or possessed for the purposes of issue;
  • “custodian” means (i) a corporation whose principal business is to act as a securities custodian, or (ii) an authorised financial institution under the Banking Ordinance (Cap. 155 of the Laws of Hong Kong); an overseas bank; a corporation licensed under the SFO; or an overseas financial intermediary, whose business includes acting as a custodian; and
  • “portfolio” means a portfolio comprising any of the following (i) securities; (ii) certificates of deposit issued by an authorised financial institution under the Banking Ordinance (Cap, 155 of the Laws of Hong Kong) or an overseas bank; and (iii) except for trust corporations, cash held by a custodian.

Institutional Investor / Accredited Investor Definition

An institutional investor as defined in Section 4A of the SFA and Securities and Futures (Classes of Investors) Regulations 2018 is:

(a) the Singapore Government;

(b) a statutory board as may be prescribed by regulations made under section 341 of the SFA, as prescribed in the Second Schedule of the Securities and Futures (Classes of Investors) Regulations 2018;

(c) an entity that is wholly and beneficially owned, whether directly or indirectly, by a central government of a country and whose principal activity is —

(i) to manage its own funds;

(ii) to manage the funds of the central government of that country (which may include the reserves of that central government and any pension or provident fund of that country); or

(iii) to manage the funds (which may include the reserves of that central government and any pension or provident fund of that country) of another entity that is wholly and beneficially owned, whether directly or indirectly, by the central government of that country;

(d) any entity —

(i) that is wholly and beneficially owned, whether directly or indirectly, by the central government of a country; and

(ii) whose funds are managed by an entity mentioned in sub‑paragraph (c);

(e) a bank that is licensed under the Banking Act 1970;

(f) a merchant bank that is licensed under the Banking Act 1970;

(g) a finance company that is licensed under the Finance Companies Act 1967;

(h) a company or co‑operative society that is licensed under the Insurance Act 1966 to carry on insurance business in Singapore;

(i) a company licensed under the Trust Companies Act 2005;

(j) a holder of a capital markets services licence;

(k) an approved exchange;

(l) a recognised market operator;

(m) an approved clearing house;

(n) a recognised clearing house;

(o) a licensed trade repository;

(p) a licensed foreign trade repository;

(q) an approved holding company;

(r) a Depository as defined in section 81SF of the SFA;

(s) a pension fund, or collective investment scheme, whether constituted in Singapore or elsewhere;

(t) a person (other than an individual) who carries on the business of dealing in bonds with accredited investors or expert investors;

(u) a designated market‑maker as defined in paragraph 1 of the Second Schedule to the Securities and Futures (Licensing and Conduct of Business) Regulations;

(v) a headquarters company or Finance and Treasury Centre which carries on a class of business involving fund management, where such business has been approved as a qualifying service in relation to that headquarters company or Finance and Treasury Centre under section 43D(2)(a) or 43E(2)(a) of the Income Tax Act 1947;

(w) a person who undertakes fund management activity (whether in Singapore or elsewhere) on behalf of not more than 30 qualified investors;

(x) a Service Company (as defined in regulation 2 of the Insurance (Lloyd’s Asia Scheme) Regulations) which carries on business as an agent of a member of Lloyd’s;

(y) a corporation the entire share capital of which is owned by an institutional investor or by persons all of whom are institutional investors;

(z) a partnership (other than a limited liability partnership within the meaning of the Limited Liability Partnerships Act 2005) in which each partner is an institutional investor.

An accredited investor as defined in Section 4A of the SFA and Securities and Futures (Classes of Investors) Regulations 2018 is:

(i)  an individual —

(A) whose net personal assets exceed in value $2 million (or its equivalent in a foreign currency) or such other amount as the Authority may prescribe in place of the first amount;

(B) whose financial assets (net of any related liabilities) exceed in value $1 million (or its equivalent in a foreign currency) or such other amount as the Authority may prescribe in place of the first amount, where “financial asset” means —

(BA) a deposit as defined in section 4B of the Banking Act 1970;

(BB) an investment product as defined in section 2(1) of the Financial Advisers Act 2001; or

(BC) any other asset as may be prescribed by regulations made under section 341; or

(C) whose income in the preceding 12 months is not less than $300,000 (or its equivalent in a foreign currency) or such other amount as the Authority may prescribe in place of the first amount;

(ii)  a corporation with net assets exceeding $10 million in value (or its equivalent in a foreign currency) or such other amount as the Authority may prescribe, in place of the first amount, as determined by —

(A) the most recent audited balance sheet of the corporation; or

(B) where the corporation is not required to prepare audited accounts regularly, a balance sheet of the corporation certified by the corporation as giving a true and fair view of the state of affairs of the corporation as of the date of the balance sheet, which date must be within the preceding 12 months;

(iii) A trustee of a trust which all the beneficiaries are accredited investors; or

(iv) A trustee of a trust which the subject matter exceeds S$10 million; or

(v) An entity (other than a corporation) with net assets exceeding S$10 million (or its equivalent in a foreign currency) in value. “Entity” includes an unincorporated association, a partnership and the government of any state, but does not include a trust; or

(vi) A partnership (other than a limited liability partnership) in which every partner is an accredited investor; or

(vii) A corporation which the entire share capital is owned by one or more persons, all of whom are accredited investors.

Continuation solutions encompass a host of transaction types in which a GP secures interim liquidity and/or additional primary capital for their LPs in a strongly performing asset, or set of assets, that the GP will continue to own and control. Specifically, they include continuation funds, new funds created by GPs for the purpose of acquiring the asset(s) that continue to be managed by the same GP and capitalized by one or several secondary buyers, or equity recapitalizations involving a direct equity or structured equity investment into a portfolio company. These transactions can also include a parallel investment from the GP’s latest fund into that same pool of assets (a “cross-fund trade”).