Private markets continue to shape the evolution of institutional portfolios, according to Nuveen’s fifth annual EQuilibrium Global Institutional Investor survey, with significant planned increases across private equity, credit, infrastructure and real estate.
Some 71% of UK investors plan to increase allocations to private markets over the next five years with infrastructure, credit and equity the top picks. In private fixed income, infrastructure and real estate debt are emerging as particularly attractive options.
Meanwhile, climate action is being propelled by a range of motivations, with some investors prioritising net-zero commitments, while others are driven by the strong risk-return potential of sustainable investments.
Sophie Ballard, head of UK pensions at Nuveen, said: “Private markets are redefining portfolio construction and emerging as a cornerstone for forward-thinking investors. Private fixed income, in particular, has become a favoured choice for navigating uncertain markets in 2025 and beyond.
“At the same time, environmental priorities are taking centre stage, shaping investment strategies and driving forward innovation across private markets. As sustainability becomes a key factor in decision-making, private assets provide a compelling avenue for investors to align financial goals with impactful environmental initiatives.”
The growing role of private markets
After favouring public investment grade last year, UK institutions are seeking out greater exposure to private fixed income, Nuveen’s survey found. With private credit becoming more mainstream, approximately half of investors said they are increasingly expanding into new areas of this market. Institutions are diving deeper into niche opportunities like infrastructure and real estate debt to tap into greater return potential, but private infrastructure debt remains the top choice for allocations.
Investors believe their expansion into private markets and alternatives is enhancing their investment knowledge and decision-making capabilities, while also expanding the selection of investment managers.
Harriet Steel, global head of institutional at Nuveen, added: “On a global level, the survey highlighted three key themes: investors are strategising for the next real estate cycle, expanding private market allocations, and embracing greater specialisation and impact investing among insurance clients. Internationally, these three trends highlight the increasing role that private markets play in portfolio construction, alongside the focus on long-term growth opportunities.”
The survey also highlighted a growing focus on both brown and green energy sources, with 69% of UK investors acknowledging the need to balance rising energy demands with sustainable solutions. At present, most UK investors employ clean energy or carbon reduction strategies, with 62% already having net zero commitments and 24% considering net zero.
Nature-related investments are also gaining traction, with 55% identifying nature loss as a critical economic risk and 66% acknowledging their role in mitigating it. But for many, it is still a developing area with only 37% placing a greater focus on these themes within portfolios.
More than eight out of 10 UK investors are aiming to proactively address environmental degradation by investing in areas like water and waste management, pollution control and recycling. Additionally, 58% benchmark their progress against Sustainable Development Goals, while 36% manage separate impact sleeves with clearly defined goals.
