Investors jump ship from private markets

Financial advisers are pulling back from private market investments as concerns over liquidity, fees and transparency weigh on allocations, according to VanEck's 2026 Smart Beta Survey.

The survey, which received 938 responses from financial professionals, found around half of respondents currently have exposure to private market assets, down from 60% in 2025.

Active allocations to private markets fell 15% over the same period, while opportunistic allocations declined 17%, signalling a shift in adviser sentiment towards the asset class.

Interest in allocating to private markets has also weakened, with 14% of respondents considering an allocation, down from18% last year. Meanwhile, 35% said they had no plans to allocate client funds private market assets, up from 22% in 2025.

Liquidity constraints were the leading concern cited by 39% of respondents, followed by high fees or lack or transparency at 18%. A further 10% identified an uncertain regulatory environment as a concern.

Almost 40% of respondents reported having no allocation to private markets, while around one-third had between 5% and 10% allocated. Only about 2% had more than 20% exposure.

VanEck chief executive and managing director Asia Pacific Arian Neiron said the short-term appeal of private markets was deteriorating as advisers reassessed the relative value offered by private assets.

"Private assets are struggling to attract investor capital today compared to a year ago," said Neiron.

"With bond yields sitting at around 5% to 7% return for fixed income products such as subordinated debt and floating-rate strategies, investors are questioning whether the risk premium on offer is adequately compensating for the additional risk that comes from investing in private credit."

Neiron said the shift was strengthening the case for advisers to consider public-market income exposures, with ETF's potentially benefiting from the change in allocations.

"Our discussions with advisers point to a challenging environment and headwinds for private markets," he said.

"Appetite is weakening and these concerns are driving portfolio allocation decisions, with ETFs emerging as a direct beneficiary of this shift."

Looking ahead, Neiron said fixed income was likely to remain a focus for investor capital, although persistent inflation and interest-rate uncertainty would keep credit quality and duration under scrutiny.