We continue to ask large wealth management houses what they think about topics such as whether private markets will continue to grow in importance or not.

Wealth managers seem to remain confident that private markets will continue to play an important role in portfolios, even if a few skeptical noises are heard at times. 

“The typical allocation to private markets is 6-7 per cent…with high variance, however, and some advisors aren’t using private markets at all,” Brian Griggs, head of portfolio strategy group at Nuveen, an asset manager with $1.3 trillion in total AuM (as of June 30, 2025), told this publication in a recent call.

“As public market-cap weighted indexes continue to reflect high valuations and concentration amongst a small number of similar businesses, there could be more impetus to go into the private market space,” he said. Nuveen has a total of $125 billion of private capital AuM.

A few days ago, this publication noted in its coverage of a JP Morgan study of family offices’ investment views, that they’re getting queasy about private equity funds, long an alternatives stalwart. Such funds make up nearly 10 per cent of global family office portfolios. A slowdown in distributions and extending lock-up periods without liquidity are causing clients to question the asset category, one senior figure has told this news service. Another figure said clients fear that PE funds have been lackluster over the past three years, with returns in the 5 to 6 per cent range. 

Griggs does not think that the trend of more money moving into private markets has peaked. That said, there has been some frustration at the relative dearth of IPOs in certain markets. However, there was something of a resurgence in corporate M&A in 2025, for example at the larger end of the scale. “Very few central banks are in hiking cycles, and this should be good for liquidity realizations,” he said. 

A few days ago, we asked Nancy Curtin, global CIO at MFO AITi Tiedemann Global about the “have private markets peaked?” question. She gave the example of infrastructure. “No, not [peaked] at all. Infrastructure, for example, has never looked better and the asset class looks terrific,” Curtin said.

Excitement
“There are a lot of things to be excited about today in the private capital markets,” Griggs said. And he also thinks brick-and-mortar assets are worth attention. “Real estate in our view is one of the best ideas coming into this year,” he said. The sector went through a difficult period post Fed policy tightening but today looks poised for a comeback.

Trying to predict markets is not the main game in town for these large institutions – identifying clients’ goals and risk tolerances and working from this foundation toward asset allocation is what counts.   

Pitcairn CIO Nathan Sonnenberg told this news service that this MFO has four core components it uses for constructing robust investment portfolios: Global equities for growth; fixed income for yield and purchasing power; real assets (infrastructure, property, commodities, gold, etc) for equity-like returns with inflation protection; and then hedge funds for consistent returns and volatility reduction.

Sonnenberg talked about the benefits of identifying idiosyncratic sources as a means of reducing correlations and improving diversification. “We like to put together the most robust portfolios that we can stress test,” he said, compared with previous market regimes or environments, as well as future market movements.

The past year was unusual in certain ways.

“Last year was one of those years – equities, private markets, bonds, portfolio diversifiers (real assets and hedge funds) – where everything worked. That’s very rare,” Sonnenberg said. 

“I feel we are in a bit of a sweet spot; we are coming into lots of optimism of economic growth, earnings growth, productivity enhancements and yes…there is lots of still announced and yet to be deployed capex,” he said. “The wild card for 2026 will be if and when we see more companies report about the positive impact (ROI) that AI is actually having on the productivity of business workforces.”

What next?
Nuveen’s Griggs said that the US central bank might be less inclined to cut rates than markets had perhaps expected. Last week, President Donald Trump nominated Kevin Warsh as the next chairman of the Federal Reserve – as discussed here. The appointment is subject to Senate approval. 

“Our view is to tilt to the idea that the Fed might cut less than the market might expect in the years ahead,” Griggs said. Inflation pressures linger, although the labor market is cooling.

“We think the Fed will reduce interest rates two more times this year, but credit selection will continue to matter more than duration positioning within fixed income,” he said.  

Griggs sees the US Treasury 10-year yield moving in a range of 4.0 per cent to 4.25 per cent.

Advisors are reconsidering how to think of fixed income and moving toward bonds that give more inflation protection. Buying shorter-dated bonds from those who need available liquidity will continue, but also different forms of diversified credit – both public and private – for risk-adjusted return opportunities, he said. 

Griggs is positive about corporate bonds, as corporate balance sheets are strong; corporate tax reform, robust consumer spending and the impact of AI is positive for the corporate world in terms of earnings. However, much of these forces are priced in. Corporate bond yield spreads to Treasuries are relatively tight. There has been some movement into areas such as emerging debt, securitized sectors and private credit, he said.

FWR asked Griggs about the big move up in the gold price to near $5,600 per ounce (his comments were recorded a few days before the yellow metal subsequently slipped below the $5,000 mark). 

“If you don’t have gold exposure [now] then it is not a good idea to do so at these levels,” he said.