Private Markets Poised for $20T Growth Despite Near-Term Headwinds, Franklin Templeton 2025 Outlook
- Editor
- Jan 30
- 2 min read
What's New
Franklin Templeton's 2025 Private Markets Outlook reveals private markets are expected to reach nearly $20 trillion in assets under management within the next few years, despite recent fundraising challenges and a slowdown in exits.
Why It Matters This transformation signals a fundamental shift in how capital is allocated globally, with private markets becoming an increasingly integral part of the financial system and offering new opportunities across multiple sectors.
Big Picture Drivers
Demographics: Aging population and millennial wealth accumulation driving demand for alternative investments and specialized real estate
Innovation: Technology and AI advancement creating new investment opportunities in data centers, life sciences, and digital infrastructure
Liquidity: Extended hold periods and slower exits creating opportunities in the secondary market
Specialization: Shift away from traditional sectors toward alternative and specialized market segments
Competition: Increasing concentration of capital in mega-funds driving opportunities in middle-market segments
By The Numbers
$15 trillion: Current global private markets AUM
27%: Average institutional portfolio allocation to private markets (up from 17% a decade ago)
$140+ billion: Expected secondary market transaction volume in 2024
30%: Share of alternative sectors in $11.7 trillion US institutional CRE universe
Key Trends to Watch
Direct Lending Evolution: Upper market becoming crowded while opportunities emerge in middle market and specialized lending
Real Estate Transformation: Traditional office sector struggles while alternative sectors like healthcare and data centers gain prominence
Secondary Market Growth: Continued expansion beyond traditional LP stakes into single-asset continuation vehicles
Private Wealth Access: Growing democratization through new fund structures and lower investment minimums
The Wrap Success in 2025's private markets will require investors to look beyond traditional strategies and focus on specialized segments with less competition, stronger value-creation potential, and clearer paths to exit.
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