The Private-Market Liquidity Gap Advisors Can Close

• North America faces the highest liquidity concerns, with 70% of asset owners citing it as a barrier compared to 65% in APAC and lower in Europe
• Private equity (43%), infrastructure (35%), and private credit (32%) are attracting the most new capital, while real estate sees net outflows with 24% cutting exposure versus 16% adding
• Europe leads with the most aggressive target allocation of 25% to private markets, up from 20% currently, ahead of APAC (23% from 19%) and North America (21% from 18%)

Summary: Private Market Liquidity Gap Creates Advisory Opportunity

Morningstar's fifth annual Asset Owner Perspectives Survey reveals institutional investors face significant barriers to expanding private market exposure despite strong appetite. The survey polled 504 asset owners across North America, Europe, and Asia-Pacific in July 2026.

Key Findings:

Allocation Targets: Average private market allocations are projected to increase from 19% to 23% within five years. Europe leads with the most ambitious target of 25%, followed by APAC at 23% and North America at 21%.

Major Barrier - Liquidity: 63% of asset owners globally cited liquidity as the top obstacle to increasing private market allocations. North America showed the highest concern at 70%, followed by APAC at 65%. Transparency issues ranked second at 43%, with limited data availability at 28%.

Capital Flow: Private equity attracted the most new capital (43% of respondents), followed by infrastructure (35%) and private credit/direct lending (32%). Real estate was the only segment experiencing net outflows, with 24% cutting exposure versus 16% adding it.

Survey Demographics: Over half (57%) of respondents managed at least $1 billion in assets, with 26% managing $10 billion or more, including pension funds, insurers, family offices, endowments, and sovereign wealth funds.

Market Implications: The findings present opportunities for advisors to bridge the liquidity gap through publicly traded private equity and credit ETFs, which offer daily liquidity and standardized disclosure. Diversification from public markets (56%) and higher expected returns (42%) were primary motivations for increasing private market exposure.

Regional variations exist, with APAC emphasizing diversification (60%) and Europe focusing more on returns (46%) and supportive government policy (19%).