Local instos are more likely to up their allocations to private markets in coming years – in addition to seeking out new niche opportunities within the asset class – than their global counterparts, new data has found.
Nuveen’s 2025 EQuilibrium Global Institutional Investor Survey revealed that in Australia, three quarters (75 per cent) of institutional investors plan to increase their allocations to private markets over the next five years, compared to 66 per cent of investors globally.
Private infrastructure and private equity were flagged as top picks among Australian investors, followed closely by private credit.
Regarding the latter, over half or 59 per cent of Australian instos said they are expanding their private allocations into new niche opportunities, including NAV lending, esoteric asset-backed securities and energy infrastructure credit. This topped the global average by 12 per cent.
Commenting on the findings, Nuveen head of Australia, Andrew Kleinig, explained that local institutional investors are seeking opportunities offshore to complement their existing local investments.
“Niche private credit opportunities are also gaining momentum among Australian investors in areas such as energy infrastructure credit and fund finance, showing greater demand in areas outside traditional private credit sectors,” Kleinig said.
He also noted a strong interest from family offices, private wealth and high-net-worth individuals for private market solutions.
The scrutiny of private markets has increased recently, with ASIC issuing a paper last month with the aim to explore whether superannuation funds, in particular, will further entrench this “opaque” sector within the economy.
Namely, the paper, which chair Joe Longo described as one of its “most important pieces of proactive work”, highlighted that as public markets shrink and “opaque” private markets expand, ASIC is keen to explore how it can both up the attractiveness of public markets and enhance transparency in private markets.
“At present, ASIC’s data and information-gathering powers are inefficient and incomplete. We simply can’t do our job properly if we are in the dark,” Longo said at the time.
"Public and private markets support one another, and both are critical to our economy ... The critical point for ASIC is whether there is a need for interventions to address risk or adjustment to how regulation operates to take advantage of opportunities important for the attractiveness of our capital markets."
Just this week, it was reported that Count Financial has recommended for its advisers to exit three Metrics Credit Partners funds, over concerns with private credit risks.
The $22 billion non-bank lender pushed back, arguing that its investment products are institutional-grade, with strong transparency and governance standards.
