Public market volatility and ongoing economic uncertainty make it challenging for advisors to build resilient, diversified portfolios. That’s why more financial professionals are turning to private markets to find new avenues to capture the drivers of long-term growth.
According to a Cerulli survey of over 200 financial advisors, nearly half plan to pursue private markets to seek enhanced return potential for their clients. This statistic highlights the growing recognition of private equity, private credit, infrastructure, and real estate as valuable assets in diversified portfolios.
While private markets provide significant opportunities, they also come with challenges and risks. These investments require expertise, due diligence, and the right guidance. Skilled advisors and experienced managers play a critical role in helping investors navigate them with confidence and care. Even with broader access and growing interest, it is natural for some investors to remain cautious. Let’s take a closer look at five of the most common myths and misconceptions.
Reality: All investments carry risks, but private markets can provide a balance of risks and rewards in the long term when managed well. Private market managers apply thorough research, diversify investments across sectors, and manage liquidity redemption windows alongside financial advisors to meet investor goals.
In a Hamilton Lane Annual Global Report, 76% of the advisors surveyed said their clients see private markets as providing higher reward compared to stock and bonds. The reason? Performance and diversification.
Reality: While public companies report earnings quarterly, many private market funds now provide regular, structured reporting as well. This often includes performance updates, net asset values (NAVs), and strategic insights.
Driven by growing investor expectations and regulatory developments, private funds are raising their transparency standards to more closely match those of public markets. Many leading managers deliver detailed quarterly and annual reports, and some provide investors digital portals for real-time access to fund information.
Transparency can still vary among providers, but private markets are moving toward more consistent and comprehensive reporting.
This is not just about chasing bigger gains; it’s also about managing risk by investing in assets that behave differently from public markets. Because private market investments are less connected to stock market ups and downs, and more tied to intrinsic value, they can help smooth out an overall portfolio’s performance.
Strategic asset allocation is also critical in mitigating risk. Our research suggests that an allocation of approximately 15% to private markets in a portfolio can help investors effectively balance volatility and long-term returns.
Reality: Illiquidity means your money is tied up for a period of time, which some investors find concerning. However, this “lock-up” can be beneficial for long-term investors. Without the pressure to sell quickly, advisors can focus on growing investments over several years, historically resulting in higher returns.
And with many U.S. companies staying private for longer, investors can gain greater access to early-stage growth and value creation opportunities. OpenAI, the developer of ChatGPT, is one example, with a recent valuation of approximately $500 billion.
The private market has also evolved to provide limited-liquidity options like interval funds that provide regular opportunities to redeem shares while still capturing the benefits of private markets investing. These limited-liquidity fund structures can provide more flexibility, which makes them a practical entry point into these markets.
Reality: Private markets were once largely limited to institutions and family offices, with high minimum investment requirements that placed them out of reach for most investors. Today, minimums have fallen dramatically, especially in interval and private credit funds that typically accept initial investments in the $10,000-$25,000 range.
Adams Street Partners reports that retail investors accounted for 16% of the $25 trillion private markets assets under management (AUM) in 2022. This share is expected to grow to 22% of $60 trillion AUM by 2032.
Reality: Private markets can seem overly complicated and difficult to navigate, especially when it comes to understanding liquidity timelines, reporting, and strategy. However, financial advisors and wealth management firms now provide access to private market investments as part of their portfolio solutions. This means financial professionals handle the selection and monitoring of private funds, due diligence, and liquidity windows.
Private markets are becoming an increasingly important part of the modern investor’s toolkit. They provide access to unique opportunities that might not be found in public markets alone, with potential for enhanced returns and diversification.
As private markets grow, understanding the myths and realities is key to making informed decisions. With the right guidance and management, private markets can be a valuable part of a well-rounded investment strategy. Talk with your financial advisor to see if private markets are right for you.
IMPORTANT INFORMATION ABOUT THE RISKS OF INVESTING IN PRIVATE ASSETS
This report is for informational purposes only, it is not an offer, solicitation, or recommendation to buy or sell any particular investment or investment strategy, and should not be considered investment, legal or tax advice.
Investing in private assets, which are accessed through private markets, involves significant risks, including the risk of complete loss. Past performance does not guarantee future results.
Private asset investments are often illiquid, meaning an investor's ability to sell may be limited for extended periods of time. Investors with a future need for liquidity, i.e., access to cash, should carefully consider if private asset investments are appropriate for their particular financial situation.
Investing in private markets is intended for experienced and knowledgeable investors who are able to bear the risks of the investments.
AssetMark, Inc. is an investment adviser registered with the U.S. Securities and Exchange Commission.
8454113.1 | 10/2025 | EXP 10/31/2027
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