Individual investors are showing growing interest in alternative assets, and firms specializing in this category are, in turn, increasingly focused on wealth management channels. This virtuous cycle, driven by product innovation and the search for returns and diversification, is leaving its mark on the industry globally. Today, it’s hard to find a major player in the private markets space that doesn’t view this trend as a key growth vector.
What was once an exclusive club for large institutional investors has opened up substantially, as industry transformation, and the differing return dynamics of private and public markets, continues to bring retail clients and large asset managers closer together. “Retail investors and pension systems around the world are increasing their participation in private markets, supported by regulatory changes expanding access to alternatives and a growing interest in infrastructure and real assets,” JP Morgan Asset Management noted in a recent report. The firm added, “This democratization of access is reshaping investor bases and fueling further growth.”
Naturally, asset managers are taking note and adjusting their strategies accordingly. While most of the big names in alternatives have yet to report their 2025 results, those that have emphasize the role of wealth management channels in their positive earnings.
A Beneficial Dynamic
Blackstone, for example, reported its best results in 40 years. While retail remains a minority share of the business, the firm highlighted the trend during its recent analyst call. “It’s notable that our capital raised in private wealth grew 53% year-over-year in 2025, reaching $43 billion, and we expect strong inflows again in 2026,” said Chairman and CEO Steve Schwarzman.
EQT, which also released results last week, noted that 26% of all capital raised during the 2024–2025 period came through private wealth channels. In an investor presentation, the firm detailed that its four evergreen funds, with a NAV of $4.1 billion, brought in $1.05 billion in flows during the first half of last year alone.
Other major players in the sector are set to report soon: Hamilton Lane on Tuesday, February 4; followed by KKR and Ares on Wednesday, February 5; Carlyle on Friday, February 6; and Apollo on Tuesday, February 11. All have previously highlighted the strength of private wealth flows and have made business decisions reflecting that momentum.
Carlyle CEO Harvey Schwartz noted that inflows from private clients into evergreen funds have risen from $300 million per quarter to $3 billion since he joined the firm in 2023. Meanwhile, KKR CFO Rob Lewin reported that the firm’s “K-series” vehicles, its family of wealth management–focused funds, raised $4.1 billion in Q3 alone. For Apollo Global Management, President Jim Zelter said the July–September period brought $5 billion in inflows from this segment.
The Key Piece: Semi-Liquids
The development of evergreen products, offering slightly more liquidity than traditional alternatives, is widely seen as critical to the expansion of this distribution channel.
“Retail investors will continue shaping the market,” predicted Eric Deram, Managing Partner at Flexstone Partners. In Natixis’s 2026 Alternatives Outlook, he wrote: “Evergreen semi-liquid products are gaining traction, appealing to both institutional and individual investors thanks to their simplicity and liquidity profile.”
As a result, product development in this area is now a top priority for major asset managers. Ares Management Corporation, for example, announced in its Q3 results that it had raised its 2028 AUM target for semi-liquid products in the wealth segment from $100 billion to $125 billion.
This is the prevailing tone across the industry, and one that will likely feature heavily in analyst and investor conversations during this reporting season. The sector is harnessing growth momentum from an expanding contributor base, and product offerings must evolve accordingly.
A Core Portfolio Component
Various surveys of financial advisors in developed markets show that alternatives are widely used in private portfolios. The fourth edition of the Alternative Investment Survey by CAIS and Mercer in the U.S. found that nine out of ten advisors include this asset class in portfolio management. Within that group, 16% allocate more than 20% to alternatives, while 49% have more than 10% exposure.
Independent RIAs and family offices appear to lead adoption, according to the survey. In this segment, one in four advisors allocates more than 20% to private markets.
Looking ahead, 88% of respondents plan to increase their alternatives allocation over the next two years.
In terms of product preferences, semi-liquids stand out: among advisors using alternatives in client portfolios, 82% use evergreen funds, either exclusively or in combination with other structures, with most of their clients. Private equity and private credit remain the most popular categories.
In Europe, data from the Private Banks and Wealth Managers Fund Selectors Survey by Novantigo show that UHNW clients have the highest exposure to private assets. Of this group, 33% allocate between 5% and 10% of their portfolio to such investments; 23% allocate between 10% and 15%; and 26% allocate more than 15%.
“Looking ahead, all client segments are expected to increase their private markets exposure, particularly in the HNW and UHNW segments,” noted the financial services firm in Efama’s Asset Management in Europe report.
The expansion of this trend in Europe has been supported by regulation, with the Eltif 2.0 era opening access to semi-liquid strategies for individual investors in the region.
Business Implications
Looking forward, the expectation is that this positive trend will continue. “We expect retail investors to become a growing source of AUM and fee-related revenues,” stated S&P Global Ratings in its Global Asset Manager Sector View for 2026.
However, the growing retail investor base also brings risks, the agency noted. “Products designed for individual investors may be more prone to volatility due to higher redemption rates, potentially resulting in more volatile EBITDA and leverage for asset managers with greater retail concentration,” the report said.
On another front, M&A dynamics in the industry suggest that firms are seeking to scale and add new capabilities. According to Deloitte’s Investment Management Outlook for 2026, a significant share of transactions in 2025 targeted wealth management and investment advisory companies.
“The continued expansion of alternatives offerings underscores the vital role that wealth management firms can play” in supporting clients, the firm noted, adding that this shift has also been fueled by the multi-trillion-dollar generational wealth transfer currently underway.
