Goldman Sachs Survey | Private markets gaining momentum, but challenges remain

What's new: Private market investors express growing optimism across asset classes as inflation moderates and valuations adjust, according to Goldman Sachs' annual survey of 190 limited partners (LPs) and 45 general partners (GPs).

Why it matters: The stabilizing macro environment and easing of the denominator effect are creating new opportunities, but investors must navigate persistent valuation gaps and operational constraints.

The big picture: After two years of disruption, the private markets industry is evolving:

• 39% of LPs are increasing deployment while only 21% are reducing or pausing, down from 39% last year

• 60% of GPs have expanded their product offerings

• Infrastructure and private credit remain under-allocated for most LPs

Key trends to watch:

• Geopolitical risk tops investor concerns (60% cite it), overtaking recession fears

• AI remains the #1 expected driver of industry evolution

• Traditional sectors like utilities and transportation appear overlooked despite strong fundamentals

• GP-led secondaries gaining traction as exits remain challenged

By the numbers:

• 50% of LPs are currently invested in secondaries

• Only 1% of LPs have achieved their sustainable investing goals vs 20% of GPs

• 40% of LPs are using or considering semi-liquid vehicles for private equity

The bottom line: While optimism is returning, the industry faces an evolving landscape requiring new approaches to value creation, liquidity, and technology adoption. Success will require careful navigation of persistent challenges around valuations, deal execution, and operational capacity.