Goldman Sachs Surveys Global Private Equity LPs and GPs
Overall Investor Sentiment Remains Positive
Rising Interest in CVs and Secondary Transactions
Evergreen Funds With No Maturity Draw Attention
Geopolitical Risks Remain a Major Con
Goldman Sachs conducted a survey of major private equity limited partners (LPs) and general partners (GPs) worldwide and found that the overall outlook on the investment environment remains positive. The firm noted that investment opportunities in artificial intelligence (AI) and related infrastructure are increasing, and that investors remain optimistic about capital recovery despite high valuations. However, the greatest risks identified were still geopolitical tensions and political uncertainty.
On October 28, Goldman Sachs Asset Management announced that it had conducted the "2025 Private Markets Outlook Survey" with 250 LPs and GPs around the world, and shared these findings.
According to the survey, overall investor sentiment in the private markets remains positive. 83% of investors responded that they plan to allocate as much or more capital to private markets compared to last year, with 43% indicating they plan to allocate more capital than last year (39%).
In particular, optimism regarding real assets has increased significantly. Investors expect that by the end of this year, the environment for asset classes such as infrastructure (93%), private equity (82%), real estate (81%), and private credit (70%) will remain at current levels or improve somewhat.
Tebas Canel, Global Head of Alternative Investment Infrastructure at Goldman Sachs, said, "The infrastructure sector is benefiting from continued new investments by both governments and the private sector," adding, "Investment opportunities are increasing in areas such as AI and digitalization, power generation and transmission, global trade environment, waste management, and water supply."
Fund Transfers and Inter-Manager Transactions Also Considered
Asset managers are also showing greater interest in utilizing alternative structures. According to the survey, 30% of respondents indicated they may use continuation vehicles (CVs) this year, a significant increase from less than 20% last year. Overall, the number of managers who said the likelihood of using CVs has increased compared to last year also rose by 6%. CVs are structures that transfer assets from an existing private equity fund (PEF) to a new fund at maturity, extending the investment period for assets that are difficult to realize returns on immediately. In this process, new or existing investors may also make additional investments.
Additionally, there has been a noticeable trend toward more active participation in the secondary market as managers seek liquidity and portfolio rebalancing. The share of respondents planning to participate in the secondary market this year was 17%, up 6 percentage points from 11% last year. Secondary deals refer to transactions where existing PEFs or venture capital (VC) firms sell their equity stakes in companies to other PEFs and so on.
Most LPs Have Met or Underallocated Asset Allocation Targets
Most LPs were found to have either met their private market asset allocation targets or to be underallocated. In the case of infrastructure, 45% responded that they were underallocated, five times higher than the 9% who said they were overallocated. Private credit also showed a significant gap, with 45% underallocated and 12% overallocated. For real estate, the proportions of underallocation (26%) and overallocation (25%) were nearly equal. The areas with the highest underallocation relative to targets were co-investments (62%) and secondaries (45%).
James Reynolds, Co-Head of Private Credit at Goldman Sachs Asset Management, stated, "Private credit is expanding its transaction activity based on its unique characteristics, and with growing interest in investment-grade private credit, especially asset-backed loans, it will play a key role in capital raising activities." He added, "Managers with scale will strengthen their competitiveness by consistently identifying investment opportunities and navigating the credit investment cycle."
Interest in Evergreen Funds Increasing
Interest in the 'evergreen' structure, which operates continuously without a fixed maturity, is rapidly growing among institutional investors. Traditional private equity funds have a finite lifespan, going through cycles of capital raising, investment, exit, and liquidation. In contrast, evergreen funds have no set maturity (liquidation date) or are structured to last much longer than typical funds. Investors can make regular additional contributions or withdrawals. Once established, the fund continues to operate, with capital cycling through, much like an 'evergreen' tree.
Currently, more than 30% of institutional investors in the private equity and infrastructure sectors have already adopted or are considering the evergreen structure. In private credit, the figure exceeds 50%, and in real estate, it is over 40%.
Notably, more than 80% of large asset managers have adopted or are considering the evergreen structure, while among smaller managers with less than $10 billion in assets under management (AUM), only about one in four are utilizing or considering this structure.
Geopolitical Issues Remain the Biggest Risk
Respondents again cited geopolitical tensions and political uncertainty as the biggest risk factors this year, as they did last year. The next most significant concerns were political instability and tariffs, which were newly added to the survey. However, in the United States, managers considered high valuations to be the greatest risk, indicating regional differences in risk perception.
Less than one-third of respondents cited the risk of an economic recession. As expectations for interest rate cuts have spread, concerns about interest rates have also eased. In addition, respondents this year were much less concerned about the cost and availability of capital compared to last year.
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