The growing demand for liquidity in private capital, the investment needs in energy and digital infrastructure, and the expansion of alternative financing to European companies are shaping a new stage for private markets. Franklin Templeton identifies opportunities in these three areas, in an environment in which specialization, diversification, and manager selection will be increasingly decisive.
Private markets have entered a new phase of maturity. Their global assets have quadrupled since 2015, reaching approximately 20 trillion dollars in 2025, and could reach 27 trillion by 2030. This expansion reflects the growing role of private capital in financing the economy and its importance in building diversified portfolios.
In this context, Franklin Templeton, whose private markets platform manages nearly 300 billion dollars and has more than 1,200 professionals in 23 countries, identifies three areas with special potential: the private capital secondary market, infrastructure, and direct financing to European small and medium-sized companies.
These outlooks were discussed during the second Franklin Templeton Private Markets meeting, held in Madrid on October 21, with specialists from its various investment platforms.
The firm highlights that, as the market grows and becomes more complex, diversification, knowledge of the sources of return, and the ability to select managers and assets are fundamental to capturing opportunities and managing long-term risks.
Secondaries: Liquidity And Value Creation In A Market That Demands Greater Selection
The growth of private capital and the lengthening of the periods companies remain outside the stock market are driving the development of the secondary market, which allows investors to obtain liquidity by selling their stakes in private funds.
Since 1996, the number of publicly listed companies in the United States has fallen by almost 50%, while the overall business fabric has continued to grow. At the same time, the average period that companies remain in private hands before going public has doubled, going from approximately six years in 2000 to twelve in 2025. Globally, nearly 80% of companies with revenues above 100 million dollars are private.
This evolution highlights that a significant part of business value creation takes place outside listed markets.
Lexington Partners, a Franklin Templeton platform specialized in secondaries, highlights the opportunities offered by acquiring stakes in private capital funds with already established portfolios and a greater degree of maturity. Compared to primary investments, these transactions allow a better understanding of the underlying assets, access to immediate diversification by company, sector, geography, manager, and years of investment (vintages), and help to mitigate the J-curve, a characteristic of private capital.
The growing need for liquidity among investors and the greater complexity of transactions are expanding the universe of opportunities. However, they also raise the importance of selection: the ability to analyze the underlying companies, properly value the portfolios, and structure the transactions is essential to identify attractive investments and manage risks.
Infrastructure: Artificial Intelligence, Energy Security, And Geopolitics Drive Investment
The transformation of energy systems, the deployment of artificial intelligence, and the reorganization of supply chains are driving a new investment cycle in infrastructure.
Franklin Templeton identifies three major structural drivers under its EDGE vision: energy, digitalization, and growth of developing economies (by its English initials). Their convergence is generating long-term capital needs that can hardly be covered exclusively through public financing.
The expansion of artificial intelligence is tightening the link between digital and energy infrastructure. The growth of computing capacity requires new investments in data centers, power grids, energy storage, and connectivity.
DigitalBridge, a manager specialized in digital infrastructure and strategic partner of Franklin Templeton, identifies three interdependent components to meet this demand: computing, connectivity, and energy supply. The availability of reliable electricity, access to grids, and the ability to develop new facilities quickly are becoming critical factors for the viability of projects.
For its part, Copenhagen Infrastructure Partners, a manager specialized in energy infrastructure and strategic partner of Franklin Templeton, identifies in electrification, rising energy demand, and security of supply some of the main investment drivers of the coming decades.
Added to these trends is a geopolitical environment that is accelerating the search for strategic autonomy, the diversification of supply chains, and the development of infrastructure close to production and consumption centers.
In this context, opportunities are not limited to the acquisition of operating assets. Newly built projects (greenfield) can offer additional value creation potential compared to infrastructure already in operation (brownfield), in exchange for assuming higher development, construction, and execution risks.
For Franklin Templeton, the main convictions in this segment are concentrated in the energy transition, digital infrastructure, and sustainable infrastructure, areas backed by long-term structural investment needs.
Private Credit: Opportunities In The Lower Segment Of The European Mid-Market
Private credit continues to consolidate itself as an alternative to bank financing in Europe. Within this market, Franklin Templeton identifies especially attractive opportunities in the lower mid-market segment, characterized by less relative competition than large leveraged financing transactions.
This segment, which comprises transactions with debt volumes between 15 and 100 million euros, generates more than 700 transactions per year, according to estimates by Apera Asset Management, a Franklin platform specialized in European direct financing.
The smaller presence of large credit funds and the limitations of bank financing in certain transactions create opportunities for managers with direct origination capacity, knowledge of the local business fabric, and experience in structuring loans.
Apera highlights the appeal of transactions with moderate leverage levels, usually between 2.5 and 4 times, loan-to-value ratios of 40%-50%, and between two and four financial protection clauses (covenants).
These structures can offer greater contractual protection mechanisms and the ability to intervene early in the event of a deterioration in the borrower’s financial situation, although they do not eliminate credit, default, or capital loss risks.
In an increasingly competitive market, discipline in lending will be as important as the ability to identify opportunities. Company selection, portfolio diversification, the strength of guarantees, and recurring origination of transactions will be fundamental factors in generating risk-adjusted returns throughout the economic cycle.
Specialization And Manager Selection Will Define The Next Stage
The maturity of private markets is expanding the investment universe, but it is also raising the demands of analysis and selection. The convergence between digitalization, energy, corporate financing, and liquidity needs opens new opportunities, while increasing the complexity of strategies.
One of the main features of these markets is the high dispersion of returns between managers, which can be considerably greater than in traditional markets. Therefore, identifying an attractive structural trend does not by itself guarantee good results: the experience of the teams, their origination capacity, valuation discipline, and risk management can determine substantial differences in returns.
For Franklin Templeton, the next stage will be defined not only by access to growth opportunities, but by the ability to select the right managers, assets, and structures to turn that potential into sustainable long-term value.
Diversification, specialization, and a long-term investment vision will therefore be the fundamental pillars for navigating this new phase of private markets.
