MSCI Unveils First State of Private Markets Report: A Turning Point for Private Market Dynamics
On May 13, 2026, MSCI Inc. (NYSE: MSCI) released its first comprehensive report titled "State of Private Markets 2026," analyzing significant structural changes in private markets as institutional and affluent investors continue to allocate more assets to this space. The report highlights the increase in demand for transparency, persistent liquidity constraints, and the need to evaluate investments through a total portfolio approach, marking a transition towards a new maturity phase within the private markets landscape.
The key findings of the report reveal that the gap in transparency is widening. Currently, private markets account for approximately one-fifth of large institutional portfolios. However, investors still rely on inconsistent and delayed data when making timely investment decisions. This lack of reliable information presents a challenge in the ongoing evolution of private markets, which now demand more robust data infrastructures to meet the needs of its growing investor base.
Private credit, another significant focus of the report, is facing a phase of expectation adjustment. The increasing redemption rates in semi-liquid "evergreen" funds, coupled with mounting stress among borrowers, are testing the credibility of valuations and liquidity. As a result, trust in the valuation practices in private credit markets is being scrutinized, especially as signals of financial stress from borrowers, particularly smaller funds, become more prevalent.
Moreover, the slow pace of exits in private equity investments is contributing to a worsening fundraising environment, leading investors to increasingly rely on secondary markets and continuation vehicles to secure liquidity. The report emphasizes that the current climate of liquidity constraints is impacting distribution to investors and is spurring activity in the secondary market as the investment recovery slows.
As artificial intelligence (AI) continues to reshape investment landscapes, the report notes that AI assets comprise about 16% of the global private equity market. However, the necessary infrastructure investment projected to support data centers, software, and energy systems in this sphere will require trillions of dollars in additional capital moving forward.
The growth and subsequent challenges posed by evergreen funds are also central to the report’s findings. While these funds have expanded access to investment opportunities, they have also introduced new complexities surrounding liquidity management and valuation discipline. Increased adoption of these vehicles may widen the gap between investor expectations cultivated in public markets and the realities of private market investments.
Luke Flemer, Head of Private Assets at MSCI, states, "While private markets function as an asset class, the infrastructure supporting them has not kept pace with the market's growth. The pressures on liquidity, the variability in trust around mark-to-market valuations, and the recent stresses in private credit markets all stem from a fundamental lack of transparency. It's crucial for investors to accurately understand their asset exposures, valuations, and the places of risk to effectively manage both public and private investments."
Through the report, MSCI delineates the emerging stresses within the private credit market as a primary area of concern. The analysis indicates that the market's focus is shifting towards maintaining accurate and timely valuations, especially in semi-liquid structures, amid a climate of increasing interest in financial safety.
Furthermore, the report discusses the intertwining paths of public and private markets. A growing number of investors are adopting total portfolio and factor-based approaches to better grasp investment opportunities and risks comprehensively. This integration points toward an evolution in asset management methodologies, emphasizing the interdependence between these two sectors.
In conclusion, MSCI emphasizes its commitment to developing the foundational infrastructure necessary for private markets to support industry growth. The organization aims to equip investors with data, analytics, and tools that will enhance their decision-making capabilities across portfolios effectively. For extensive insights and findings, refer to the complete report, "State of Private Markets 2026."
About MSCI: MSCI Inc. is dedicated to enhancing global market infrastructure by connecting financial ecosystem participants with a common language. With its cutting-edge technology and research-backed offerings, MSCI provides investors with data, risk analysis tools, and indices, fostering better decision-making and driving innovation in the investment landscape. MSCI supports a diverse range of clients, including asset managers, owners, private market sponsors, hedge funds, wealth managers, banks, insurance companies, and corporations. Explore more at www.msci.com.
About MSCI Japan: MSCI Japan serves as a key player in the Japanese investment ecosystem, leveraging global insights with local expertise to assist institutional and retail investors in navigating an increasingly complex investment environment. With over 20 years of presence in Tokyo, MSCI has established long-term partnerships with a spectrum of institutional clients, including pension funds, insurance firms, asset management companies, hedge funds, and businesses. By providing advanced analytics and risk management tools, MSCI enables investors to make well-informed decisions and build resilient portfolios. The MSCI indices are foundational for major Japanese institutional investors in asset allocation and contribute to achieving global diversification and long-term growth for retail investors under NISA. MSCI's indices play a comprehensive role by connecting Japanese companies with sustainability-focused global capital markets. For further details, visit www.msci.com/japan.
The key findings of the report reveal that the gap in transparency is widening. Currently, private markets account for approximately one-fifth of large institutional portfolios. However, investors still rely on inconsistent and delayed data when making timely investment decisions. This lack of reliable information presents a challenge in the ongoing evolution of private markets, which now demand more robust data infrastructures to meet the needs of its growing investor base.
Private credit, another significant focus of the report, is facing a phase of expectation adjustment. The increasing redemption rates in semi-liquid "evergreen" funds, coupled with mounting stress among borrowers, are testing the credibility of valuations and liquidity. As a result, trust in the valuation practices in private credit markets is being scrutinized, especially as signals of financial stress from borrowers, particularly smaller funds, become more prevalent.
Moreover, the slow pace of exits in private equity investments is contributing to a worsening fundraising environment, leading investors to increasingly rely on secondary markets and continuation vehicles to secure liquidity. The report emphasizes that the current climate of liquidity constraints is impacting distribution to investors and is spurring activity in the secondary market as the investment recovery slows.
As artificial intelligence (AI) continues to reshape investment landscapes, the report notes that AI assets comprise about 16% of the global private equity market. However, the necessary infrastructure investment projected to support data centers, software, and energy systems in this sphere will require trillions of dollars in additional capital moving forward.
The growth and subsequent challenges posed by evergreen funds are also central to the report’s findings. While these funds have expanded access to investment opportunities, they have also introduced new complexities surrounding liquidity management and valuation discipline. Increased adoption of these vehicles may widen the gap between investor expectations cultivated in public markets and the realities of private market investments.
Luke Flemer, Head of Private Assets at MSCI, states, "While private markets function as an asset class, the infrastructure supporting them has not kept pace with the market's growth. The pressures on liquidity, the variability in trust around mark-to-market valuations, and the recent stresses in private credit markets all stem from a fundamental lack of transparency. It's crucial for investors to accurately understand their asset exposures, valuations, and the places of risk to effectively manage both public and private investments."
Through the report, MSCI delineates the emerging stresses within the private credit market as a primary area of concern. The analysis indicates that the market's focus is shifting towards maintaining accurate and timely valuations, especially in semi-liquid structures, amid a climate of increasing interest in financial safety.
Furthermore, the report discusses the intertwining paths of public and private markets. A growing number of investors are adopting total portfolio and factor-based approaches to better grasp investment opportunities and risks comprehensively. This integration points toward an evolution in asset management methodologies, emphasizing the interdependence between these two sectors.
In conclusion, MSCI emphasizes its commitment to developing the foundational infrastructure necessary for private markets to support industry growth. The organization aims to equip investors with data, analytics, and tools that will enhance their decision-making capabilities across portfolios effectively. For extensive insights and findings, refer to the complete report, "State of Private Markets 2026."
About MSCI: MSCI Inc. is dedicated to enhancing global market infrastructure by connecting financial ecosystem participants with a common language. With its cutting-edge technology and research-backed offerings, MSCI provides investors with data, risk analysis tools, and indices, fostering better decision-making and driving innovation in the investment landscape. MSCI supports a diverse range of clients, including asset managers, owners, private market sponsors, hedge funds, wealth managers, banks, insurance companies, and corporations. Explore more at www.msci.com.
About MSCI Japan: MSCI Japan serves as a key player in the Japanese investment ecosystem, leveraging global insights with local expertise to assist institutional and retail investors in navigating an increasingly complex investment environment. With over 20 years of presence in Tokyo, MSCI has established long-term partnerships with a spectrum of institutional clients, including pension funds, insurance firms, asset management companies, hedge funds, and businesses. By providing advanced analytics and risk management tools, MSCI enables investors to make well-informed decisions and build resilient portfolios. The MSCI indices are foundational for major Japanese institutional investors in asset allocation and contribute to achieving global diversification and long-term growth for retail investors under NISA. MSCI's indices play a comprehensive role by connecting Japanese companies with sustainability-focused global capital markets. For further details, visit www.msci.com/japan.
Topics Financial Services & Investing）
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