The recent trend of ETFs increasingly offering exposure to private assets follows a larger institutional investor trend in markets. Results from an annual institutional investor survey conducted by Nuveen detailed significant increases in exposure to private assets.
Nuveen, an asset manager with over $1.3 trillion in AUM, shared the findings from their fifth annual EQuilibrium Global Institutional Investor Survey. The survey included 800 institutions globally spanning over $19 trillion in AUM, and took place between October and November 2024. It provides a pulse check about how institutional investors view opportunities in the current market landscape. And overwhelmingly, private assets are where interest lies.
“Institutional investors continue to deepen their commitment to private markets, with 66% planning to increase allocations to private assets over the next five years,” the authors noted. “More than 90% now hold both private equity and private credit, a sharp rise from 45% in 2021, underscoring the expanding role of private markets in institutional portfolios.”
Private Assets in Focus: Real Estate and Infrastructure
AI-enthusiasm has crossed over into private assets in big ways. 37% of investors reported that they plan to grow their exposure to private real estate, up from 24% last year. Of those, 65% plan to invest in data centers. Half of institutional investors (50%) also plan to increase private infrastructure allocations this year compared to 35% in 2024.
The interest in private real estate extends globally as well. 46% of EMEA insurers reported plans to increase their private real estate investments in the next two years, a leap from 27% last year. Over half (51%) of German investors also plan to seize opportunity in private real estate this year.
Institutional investors also reported strong optimism towards private equity and their plans to increase allocations. On the private fixed income side, at the time of the survey, respondents showed increased interest in higher-risk, higher-yielding bonds. Almost half of investors reported they were looking for new opportunities within private credit that included fund finance and energy infrastructure credit.
Insurers See Opportunity in Private Credit, Impact Investments
Insurers are also buying in big to private assets in the mid-term, with 69% reporting plans to increase allocations in the next five years. Their focus centers around private credit, with real estate debt the highest priority — 45% plan to increase allocations by 2030.
Although ESG and climate became politicized topics in the U.S., insurers are doubling down on responsible investing. Nearly all (93%) of insurers either already use or plan to use environmental and social impact measurements in their portfolios. A full 55% give impact investments their own sleeve, a significant rise from 26% in 2023.
“Insurers are demonstrating an increasingly confident and sophisticated approach to portfolio construction, balancing long-term private market exposure with a commitment to impact-driven investing,” Harriet Steel, global head of institutional at Nuveen, said in the report. “Their focus is shifting to targeted opportunities in private credit, infrastructure, and sustainability-aligned investments.”
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