Institutional investors continued to rebalance toward private markets this quarter, but at a slower pace than in recent years — suggesting allocation targets are being reached rather than enthusiasm cooling.

Risk appetite has shifted rather than contracted. Portfolios are carrying more diversification and more liquidity awareness, with cash buffers rebuilt to levels not seen since before the low-rate era.

Manager performance dispersion remains wide, particularly in active fixed income and hedge strategies — reinforcing why selection matters more than ever.

Fees continue their slow decline in liquid markets, while private-market fee structures show far more resistance to compression.

This paper summarises what our research desk is seeing across manager meetings, mandate activity and client portfolios this quarter.

Key takeaways

  • Private-market allocations are maturing rather than expanding aggressively
  • Dispersion in manager performance remains high — selection is critical
  • Cash and liquidity buffers have been deliberately rebuilt
  • Fee compression is real in liquid markets, muted in private markets