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Forbes
a day ago
- Business
- Forbes
Private Markets' AUM Growth Slowing—Are We Measuring The Right Thing?
The headline number suggests a slowdown. But look closer, and the story is less about deceleration and more about a shift in where—and how—capital is flowing. Investor sentiment remains strong. McKinsey's latest survey of leading limited partners (LPs) shows continued appetite to increase allocations to private markets. The apparent contradiction between tepid AUM growth and rising investor intent points to a deeper question: Are we measuring the right thing? Traditional AUM metrics tell only part of the story. While closed-end funds declined 1% in 2024, this misses how GPs are tapping new capital sources. Alternative forms of capital—from separately managed accounts to co-investments—now represent nearly one-third of total private market assets, revealing a healthier 6% growth rate when properly measured. The data reveals the industry's true scale: alternative capital has grown to more than half the size of traditional funds. Add it all up, and you get $22 trillion in total private market assets for 2024—with these newer structures driving most of the 6% growth. Stick to the old way of counting, and you're missing how dynamic this industry has become. This shift reflects three fundamental trends reshaping how capital flows into private markets: 1. Higher-liquidity products — From evergreen funds and interval funds to non-traded REITs and BDCs, these vehicles provide investors—both retail and institutional—greater flexibility. Think of them as private market investments you can get in and out of more easily, rather than locking your money away for years. Their AUM, now $1 trillion to $1.5 trillion, has grown roughly 16 percent annually since 2020. 2. LP-demand-driven offerings — Separately managed accounts (SMAs) and co-investments give LPs more influence, tailored exposure, and often lower fees. These are 'have-it-your-way' private market deals where big investors can choose their own mix and terms, instead of taking the same package as everyone else. SMAs have grown 16–18 percent annually; co-investments 20–25 percent annually since 2020. 3. Permanent capital — Once the domain of insurance allocations, permanent capital is increasingly a balance-sheet strategy for GPs acquiring insurers. This is money that never has to be returned, letting managers invest with a truly long-term view. Leading managers have amassed $1.5–$2 trillion in these long-duration pools, growing 10 percent annually. The takeaway: Traditional AUM is no longer a sufficient proxy for market health. Measuring only closed-end vehicles is like assessing GDP by counting only manufacturing output—it misses where growth is happening. For investors, this broader definition reveals a larger, more diverse opportunity set. For GPs, it underscores the imperative to innovate product structures, expand access, and match capital to investor needs. The call to action is clear: Industry leaders should redefine AUM to include both traditional and nontraditional sources. Doing so will not just reflect the market's true size—it will signal to investors, regulators, and participants that private markets are evolving into a more accessible, flexible, and resilient asset class poised for the next era of growth. -- Maurice Obeid is a senior partner in McKinsey & Company's New York office. He thanks colleagues , Alexander Edlich (New York Senior Partner), Fredrik Dahlqvist (Stockholm Senior Partner), Christopher Croke (London Partner), Warren Teichner (New York Senior Partner), Andrew Shearer and Christina Hong (McKinsey Communications), and Sadie De Col (Senior Business Analyst) for their contributions to this article.
South China Morning Post
08-07-2025
- Business
- South China Morning Post
China expands Bond Connect by allowing more players to join banks in offshore market
China expanded the scope of investors to include more mainland-based financial groups under the eight-year-old Bond Connect programme , taking a significant step to ease capital-flow restrictions and further establish Hong Kong as an international financial centre. Advertisement Securities firms, fund managers, insurers and wealth management companies would be allowed to invest in offshore bonds through the southbound channel of the scheme from Tuesday, according to authorities in Beijing and Hong Kong. Only banks were approved when the programme was launched in 2017. The move would open up more channels to meet the growing demand from mainland investors and address their need to diversify their asset allocations, said Eddie Yue Wai-man, chief executive of the Hong Kong Monetary Authority (HKMA), at a conference on Tueaday. 'It will also bolster the development of Hong Kong's bond market by widening the investor base and enhancing market liquidity, hence increasing Hong Kong's attractiveness to both bond issuers and global investors,' he added. HKMA Chief Executive Eddie Yue Wai-man speaks at the Bond Connect Anniversary Summit on July 8, 2025. Photo: Jonathan Wong The enhancements came amid growing demand for diversification as global trade tensions escalated and a surge in household savings helped Chinese financial institutions accumulate wealth at a faster clip since the end of the Covid-19 pandemic. The daily net outflow remains capped at 20 billion yuan (US$2.8 billion), or up to 500 billion yuan per year. No changes to the limits were announced despite market speculation. Advertisement The People's Bank of China (PBOC) would enhance the opening of its financial markets, deepen cooperation with Hong Kong and ensure its prosperity as an international financial centre, said Jiang Huifen, deputy director general of the central bank's financial market department, in a video address.
Bloomberg
27-05-2025
- Business
- Bloomberg
Malaysian Assets to Gain as Funds Slash US Exposure, CIMB Says
Malaysia could end up among the biggest beneficiaries in emerging markets if the Trump administration's disruptive trade policies trigger a further selloff in US assets, according to a top executive at CIMB Group Holdings Bhd. 'We could potentially see a lot of capital freed up and move to emerging markets,' Novan Amirudin, chief executive officer of CIMB, Malaysia's third-largest bank by market value, told Bloomberg Television's Avril Hong. 'Malaysia has all the parameters that tick the boxes for investors as they look at asset allocation and investments,' he said.
Bloomberg
12-05-2025
- Business
- Bloomberg
Traders Bet the Euro's Ascent Is a Tidal Wave in the Making
By and Alice Gledhill Save ↵ For more than a decade, the flow of transatlantic capital moved in one direction, powering the ascent of an unstoppable dollar and leaving the euro far behind. Now, the biggest investors say the tide may be turning.
