Coller Capital’s latest Global Private Capital Barometer has revealed that 45 per cent of investors (up from 37 per cent six months ago) are planning to increase their private credit allocations due to escalating macroeconomic uncertainty.
The 42nd edition of the barometer gathered responses from 110 private capital investors globally, with a combined $2 trillion AUM overseen by the respondents.
The barometer further revealed that 37 per cent of investors plan to increase their allocation to secondaries, an increase from 29 per cent recorded in December 2024. Meanwhile, 28 per cent said they expect to increase their allocation to private equity (down from 34 per cent over the span of six months); however, only 10 per cent stated they plan to reduce this allocation.
According to Coller Capital, the current landscape of geopolitical and trade tensions has fostered a “more uncertain backdrop for investing”, prompting 44 per cent of investors to report that their institutions have homed in on geopolitical risk as a crucial influence in portfolio construction.
Additionally, the majority of respondents (88 per cent) said geopolitical factors pose a substantial risk to returns over the next two to three years.
Commenting on the data, chief investment officer and managing partner of Coller Capital, Jeremy Coller, said it’s “no surprise that investors are exploring alternative options to deliver returns” in the wake of heightened geopolitical and economic uncertainty.
“As Coller Capital’s 42nd Global Private Capital Barometer shows, LPs are continuing to increase their interest in private credit and secondaries and making new forays into evergreens,” Coller added.
Other themes highlighted in the barometer have revealed that investors are increasingly seeking liquidity in a tight exit environment, as secondaries transaction volumes hit $160 billion in 2024. Two-thirds (65 per cent) of investors expect more GP-led private credit deals in coming years, especially in North America.
North American investors held the strongest expectation of this increase (74 per cent).
Moreover, private equity secondaries remain active, with over half of investors (54 per cent) indicating plans to buy or sell assets.
Single-asset continuation vehicles are showing strong performance according to 47 per cent of investors surveyed, though 49 per cent of respondents said it’s too early to judge.
New manager formation is expected to outpace industry consolidation according to 38 per cent of respondents, while 36 per cent said they saw the number of spin-out firms within their private markets portfolio grow over the last two to three years.
Over a quarter (28 per cent) of LPs felt general partners (GPs) are failing to retain top talent, and most investors (71 per cent) view the growth of mega-funds as a challenge. One-third (33 per cent) believe many of their top GPs may not remain leaders in the next decade.
Institutional investors are also expanding into evergreen vehicles, traditionally used by retail clients, with growing interest in both private equity and private credit evergreen structures over the next three years, which was the case of 21 per cent of respondents, while 10 per cent said they will start to evaluate such vehicles.
Simultaneously, 22 per cent said they will maintain their exposure to private credit evergreen funds over the next three years, while 11 per cent said they will start evaluations.
