Shifting Gears: How Australia’s Private Markets Are Evolving

by Scott Wilkinson, APAC Head of Private Markets

We recently concluded our 2025 Pacific Global Investment Forum in Sydney, bringing together many large asset owners and managers from the region to discuss the investment landscape. Things are evolving rapidly both domestically and on a global scale, and now in the wake of the forum it feels like a perfect opportunity to explore how private markets are evolving in Australia.

Supers drive the private markets landscape

Australia’s superannuation funds – known as ‘supers’ are a unique aspect of its investment landscape. With a little over A$4 trillion in assets under management, they make Australia the fifth-largest holder of pension fund assets globally, with significant further growth expected in the coming years.[1]

The size of the supers makes them an influential part of the investment landscape, and their defined contribution structure has led to a mildly cautionary stance on some private market asset classes, particularly those seen as having high fees or high risk. As a result, much of the private equity allocations show a strategic tilt towards buyout, with generally lower appetite for the venture and growth allocations seen among U.S. and European investors.

The fee benefits often associated with co-investments and secondaries may be helping to drive demand for private equity investments, especially among supers and other investors that face regulatory and cost constraints.

For investors that have strict requirements around transparency, these assets can potentially offer an attractive way to enhance portfolio value and reduce cost, as well as solving issues around capital deployment timing.

But it isn’t just private equity that is seeing increased demand; the other side of the coin, private debt, has been gaining considerable attention.

Private debt is growing beyond corporate and real assets lending

Private debt’s role in global portfolios has grown considerably in recent decades, and our recent Private Markets in Motion report indicates the vast majority of private debt managers believe fundraising will increase in the coming years. We can see this clearly among Australian investors, with many following the same journey seen in the U.S. and Europe in recent years.

Australia’s large asset owners often have a preference for real assets, so perhaps it is unsurprising to see real estate and infrastructure debt as one of the primary forms of private debt investors are targeting, along with corporate debt. However, structured credit and specialty finance are growing in popularity, and institutional appetite is moving beyond direct lending.

Demand for private credit and other private market assets is not coming solely from the supers, of course. Australia’s thriving wealth management sector is also showing that there is also strong demand for private markets assets among non-institutional investors. The democratization of private markets assets is happening globally.

Real estate goes global for investors in the Pacific

Real estate is often thought of as the original private markets asset class, and one that investors typically hold with some level of bias to their domestic market – no matter where they are in the world.

Events such as our global investment forum underscore why our global scale is so important; by looking across regions, we believe that we are able to distil what is and isn’t working for large asset owners, helping ensure that the best opportunities are shared globally, and that our best practice developed in one region is made available to all.

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[1] Financial Standard: “Australian super assets set to become second largest globally” – 11th Feb 2025