Rising investor demand for private debt and growth equity are set to boost private markets fundraising this year, according to new research.
Administration and compliance firm CSC surveyed 300 general partners (GPs) and 200 limited partners (LPs) across North America, Europe and Asia Pacific about their private markets outlook.
The vast majority (81 per cent) of GPs predict rising investor appetite for private debt over the next two years, while most GPs (57 per cent) identified private debt as a key investment area.
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CSC’s survey also found that fund managers are focused on diversification, with growth equity (66 per cent), venture capital (53 per cent) and real estate (51 per cent) emerging as the top three new asset classes they are most likely to target.
GPs are most optimistic about fundraising for growth equity, with 84 per cent expecting a surge in LP demand over the next 24 months.
“Persistent higher interest rates have made leveraged buyouts more expensive, prompting many GPs to shift towards growth equity as a preferred investment strategy,” said Marshall Saffer, managing director, funds and capital markets at CSC.
“This trend is particularly visible in Asia Pacific, where 72 per cent of GPs are considering launching funds in this space.”
Private debt has seen stratospheric growth in recent years as investors look for high, stable returns and diversification away from public markets.
However, private debt fundraising fell by more than 10 per cent last year to $196.1bn (£152.3bn), according to recent PitchBook data, while overall private market fundraising dipped slightly to $1.37bn.
CSC’s survey supports predictions by PitchBook analysts that 2025 could be a “turnaround year” for private markets as private equity has recently demonstrated an uptick in exits, while investor demand for private debt remains strong.
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When it comes to geographic expansion, North America remains the most attractive market for growth, CSC found, with 52 per cent of GPs targeting the region. However, Asia (49 per cent) has overtaken Europe (45 per cent) as the second most popular region.
“APAC’s rising appeal is a testament to growing investor confidence in the region, marking a shift from previous years,” said Agnes Chen, regional managing director, APAC at CSC.
“With improving fundraising conditions and a clear move toward diversification, private markets are poised for a dynamic and opportunity-filled 2025. We are seeing robust interest across asset classes and geographies, underscoring the resilience and adaptability of private market investors.”
