After 2025 was another high-profile year for private markets, the UK’s Aberdeen Investments has released its “Private Markets House View,” showing that private markets are keeping up momentum as we head into 2026.

As global growth cools and policy divergence reshapes capital flows, private markets stand out as a cornerstone for resilient portfolios. However, a balanced approach is crucial, according to Dr Lulu Wang, head of private markets portfolio research and strategy, private market solutions at Aberdeen Investments.

“For example, in private credit, Aberdeen’s Private Markets Solutions team focus on smaller deals targeting the lower mid-market to preserve returns, where spreads have held up better,” Dr Wang said. “There are opportunities across private markets for investors seeking direct access to long-term themes and selective dislocation plays. This helps position investors to capture value and adds resilience to portfolios.”

At the start of 2026, the Aberdeen Private Markets Solutions team's "House View" is positive on global infrastructure, particularly transport, utilities, renewable energy, specialized and social infrastructure.

“Fundraising in the sector has gained momentum as robust valuations persist, with growing interest in core-plus strategies which give investors opportunity to gain exposure to digital infrastructure and energy transition assets,” the investment manager said.

These strategies tend to have a slightly higher return profile and have offered more predictable income streams. Aberdeen forecasts a five-year internal rate of return (IRR) of 9-11 per cent for core infrastructure strategies, and 12-15 per cent for core-plus strategies.

Hamilton Lane, a US private markets investment firm with $1.0 trillion in assets under management and supervision, also expects private markets to outperform public ones over the next few years, with infrastructure playing an important role. See more here and here. 

The rise of investment in private markets has been a dominant wealth sector theme in recent years. The value of global private assets funds has surged to a record $14.05 trillion this year, surging 77 per cent since 2020, and up 205 per cent since 2015. The total is expected to hit $23.9 trillion by the end of the decade, according to Ocorian, an asset servicing firm. According to UK private bank Brown Shipley, firms on average take about 12 years to go to IPO and many don’t even bother with that route.

The supply of private market opportunities has risen, relative to listed ones, since the late 1990s. One recent twist has been how US, European and other governments have sought to make private market investing more accessible to affluent, and even retail, clients via routes such as "evergreen" funds. 

Real estate
Aberdeen’s Private Markets team is broadly positive on real estate, with spreads versus short-dated government bonds remaining attractive and reinforcing selective investment opportunities. Low supply of future-fit assets continues to underpin modest real rental growth, though risks both upside and downside remain elevated.

Real estate is entering recovery with modest momentum and healthy fundamentals, though geopolitical and economic risks add uncertainty. Looser monetary policy supports a gradual improvement in returns, with long-term performance expected to favor core thematic sectors and high-quality assets amid the growing polarization of return within sectors of real estate.

“UK real estate delivered a strong performance in the third quarter of 2025, though investment volumes fell 13 per cent year-on-year due to limited supply. US growth has slowed under tariff-driven inflation, but the outlook for apartments and data centers is improving,” the firm said.

Europe shows steady gains (6.2 per cent annualized in June 2025), supported by lower interest rates, while the recovery in APAC real estate recovery is mixed, with Australia and data centers in Singapore and Japan positioned for strength.

Within real estate, Aberdeen is positive on the hotel/leisure, residential, logistics and specialized sectors, targeting a 6-8 per cent five-year IRR for core strategies and 10-15 per cent five-year IRR for value-add strategies.

Private credit
Aberdeen’s Private Markets Solutions team is positive on certain sectors within global private credit, in particular the IT, healthcare and business services sectors, but is neutral on others, and negative in the consumer sector given persistent inflation and a weak labor market.

Regulation change and tighter bank lending has created strong demand for private credit, particularly in Europe where direct lending has seen a significant uptick. Sentiment remains strong given structural shifts – for example bank disintermediation and attractive buy-and-build strategies. However, the firm focuses on smaller deals targeting the lower mid-market to preserve returns, where spreads have held up better.

“In the US, deal activity remains subdued as the ripple effects of tariff shocks and market volatility continue to weigh on transactions. Though underlying demand is robust as banks continue to retrench, providing opportunities for investors, particularly in special situations or opportunistic lending,” the firm continued.

Aberdeen forecasts a five-year yield-to-maturity return target of around 8-12 per cent for direct lending strategies, and around 6-8 per cent for investment grade private credit strategies over the same period.

Private equity
Aberdeen has a positive but cautious outlook on private equity, with preferences for IT and healthcare, and a neutral view on the consumer sector, noting lingering macroeconomic risks.

With lower borrowing costs and improved market clarity, private equity deal activity rebounded strongly across the US and Europe in the third quarter of 2025 with deal values and volumes up from 2024 signaling renewed confidence, and marking 2025 as one of the strongest years in recent history.

For buyout strategies, Aberdeen forecasts a five-year IRR target of around 10-12 per cent, with a target of around 12-15 per cent for venture capital strategies. While macro uncertainties such as inflation and tariffs remain, easing credit conditions support a cautiously optimistic outlook for continued momentum into 2026.