Private markets in Australian wealth management: Impressively diverse and a positive outlook

Access to private markets investment opportunities is democratising globally, but what do Australian financial advisers and wealth managers make of this trend? For the past two years, we've been researching and tracking familiarity with and demand for private markets across wealth and institutional channels in 13 markets around the world. Australia is one of these, and it stands out on various fronts.

On first glance, Australian wealth managers (shorthand for all retail and wholesale fund buyers and sellers surveyed) express familiarity levels roughly in line with global averages: 58% say they feel quite or very familiar with private markets in general, versus 64% globally.

There could be an element of modesty at work in this self-assessment of familiarity, however. When it comes to usage - a binary yes/no metric - Australia's wealth management industry appears more advanced. On this measure, 69% have existing client recommendations or portfolio allocations to private markets, versus a global 61%.

Of course, private markets aren't (yet) for all investors, but Australia's wealth managers report slightly higher proportions of their client base (18%) as having current exposure compared to global peers (14%). Where used, typical private markets portfolio allocations are close to the global average of 10%.

At the asset-class level, Australian usage rates are higher than average for four out of five private asset classes tested - the one exception being natural capital. Private credit and unlisted infrastructure uptake is noteworthy: 63% of Australian respondents with private markets holdings report exposure to private credit (47% globally), and 49% to unlisted infrastructure (34% globally).

The impressive diversity of allocations comes with a caveat: typical Australian allocation levels to individual private asset classes skew lower than global averages, except for private credit.

What drives this enthusiastic support of private markets investing?

Exploring the perceived pros of private markets in general reveals a lot of commonalities between markets, with nearly all (including Australia) seeing portfolio diversification, high returns potential, and decorrelation of returns as the biggest benefits. Zooming out to lesser-mentioned drivers of use, Australian wealth managers are notably more likely than average to cite low volatility too.

Being home to some of the world's largest infrastructure asset managers likely helps to raise the profile of real assets investing, not to mention the spotlight on infrastructure investment in Queensland ahead of the 2032 Brisbane Olympic Games.

It's a similar story for perceived barriers, with the most-mentioned hurdles in Australia the same as globally: lack of liquidity, lack of transparency, and high management fees. The latter is cited significantly more frequently in Australia, as well as the US and UK - three markets that demonstrate particular cost sensitivity.

None of these barriers are insurmountable given most wealth managers already engage with private markets in some form, but they highlight key concerns and considerations to be addressed, especially when it comes to client suitability.

Sticking with suitability, we ask all wealth management respondents about private markets opportunities from the perspective of client profiles. Australia is again in line with global views on most, with higher risk appetite and the age groups 41-55 and 56-65 being preferred investor characteristics.

Australian wealth managers also agree that high-net-worth investors (with $2 million+) are the most suitable client segment in terms of investable assets, but are significantly more likely than most global peers to be open to allocating upper-mass-affluent clients ($1-2 million), matched only by Canadian and French wealth managers.

Private markets have been hit by some troubling headlines over the past year, especially in private credit (and it should be noted that the latest research was conducted before further issues emerged in the Australian market).

While this certainly hasn't gone unnoticed, most wealth managers in Australia and beyond report that their sentiment towards private markets overall is either unchanged or improved compared with 2025.

Indeed, Australia registered the third-strongest net improvement, with 33% of wealth managers saying their perceptions have improved, and just 14% saying they have worsened. 'More products and access' is the overwhelming theme of reasons given in Australia for this improvement, while 'illiquidity and exit risk' is the principal driver of any deteriorating perceptions.

The future looks bright for further growth. In the near term, 56% of Australian wealth managers using private markets plan to maintain target allocations, while 37% plan to increase them - a little lower than the global average of 48%. Of those yet to start, around a quarter find private markets quite or very appealing.

The medium-term outlook looks even rosier, with nearly 90% of all Australian wealth managers expecting to have some exposure to private markets in five years' time - similar to the future landscape in all other markets in the study. That doesn't mean that every retail client will or should have holdings, but the direction of travel suggests many wealth managers are comfortable increasing the proportion that do, and via a diversity of private asset classes.