Private Wealth Is Private Markets’ Biggest Opportunity — And Its Hardest Test
Why the industry’s hottest growth channel demands more rigor, better tools, and a willingness to educate before it sells. Reflections from PEI NEXUS.
Key Takeaways
- Individual investors currently allocate just 3% to private markets; BlackRock has responded by targeting 15% private asset allocation in its new model portfolios, portending a massive change for the industry.
- The industry’s track record on educating financial advisors and individual investors is poor, and the sector cannot afford a repeat as retail access to alternatives expands.
- Firms that will win the private wealth channel are not just investing in relationships — they are investing in intelligence infrastructure, and most are starting from square one.
The Opportunity Is Generational
Private wealth dominated the agenda at PEI Nexus, one of the industry’s marquee annual gatherings for GPs and LPs. That alone signals how seriously the market has shifted. The only topic that came close was artificial intelligence — and even then, private wealth framed the conversation.
The numbers explain the urgency. Individual investors currently allocate approximately 3% of their portfolios to private investments, compared to the 23% average allocation among institutional investors, according to Fidelity. BlackRock has already moved on this signal, building model portfolios that target private assets at 15% of the overall portfolio — a direct repudiation of the traditional 60/40 construct, as reported by InvestmentNews. That is not incremental growth. That is a structural reallocation.
As allocations shift, the capital follows at scale. BCG projects $3 trillion in fresh private markets investment from individual investors by 2030. Bain’s figure over the next decade reaches $14 trillion. What registers today as a rounding error on many firms’ AUM reports will demand dedicated strategy, dedicated teams, and dedicated infrastructure.
Responsibility Has Not Kept Pace with Appetite
Nearly every session at PEI Nexus surfaced the same uncomfortable reality. Blue Owl’s widely reported halting of redemptions from individual investors — covered in detail by the Wall Street Journal — was the event’s defining cautionary reference. Speakers were direct: the industry has done a poor job educating financial advisors and individual investors on how private markets products actually work, let alone the risks attached to them.
The consensus that emerged was pointed. Funds frequently marketed as “evergreen” or “semi-liquid” need to be understood and disclosed as illiquid. The language used in distribution has not matched the reality of the underlying product.
Josh Harris of 26North was direct on the point at NEXUS, warning that mixing unaccredited investor capital with wealth capital through vehicles with differing levels of regulation presents a recipe for problems — and risks triggering a backlash against the industry as a whole, as reported by Private Equity International. It is a warning that deserves to be taken seriously.
One speaker offered a figure that stopped the room: the median time a retail investor spends researching a stock before investing is six minutes. The private markets industry cannot allow that standard to define how individual investors enter this asset class. The reputational and regulatory consequences of getting this wrong are severe — and avoidable.
Not Every Firm Should Play
The private wealth channel is not a universal opportunity. One speaker stated plainly that firms outside the top 50 should not spend a single minute pursuing it, but stay focused on institutional capital where their competitive position is clearer.
That view did not stop FOMO from gripping a much broader group, even if some of those firms limit their ambitions to family offices and high-net-worth individuals, rather than the full universe of 100,000-plus accredited investors. That is a defensible starting point — but it still demands real investment.
On the allocator side, one speaker indicated that the primary targets are the roughly two dozen independent advisory firms managing between $500 million and $2 billion in AUM — names like Hightower and Mariner. The broader coverage universe, however, is enormous: 16,500 registered investment advisors operate in the US alone. Realistically, only firms with strong brand recognition or highly differentiated track records in a specific sector will convert meaningful coverage into relationships at that scale. European markets operate differently, where advisors tend to be affiliated with larger institutions rather than operating independently.
Intelligence Is the Real Infrastructure Play
Adam Smallman of PEI was among several voices at Nexus who made the same observation: firms will need to move up the intelligence curve quickly. That means building systematic knowledge across the financial intermediary landscape — which firms exist, which investors they serve, what products those investors want, and the structural details that determine fit.
In a roundtable of 50 attendees discussing private markets systems and requirements, not one expressed satisfaction with their current setup – their CRM and data sources. Almost all described themselves as early in the journey of building and operationalizing their private wealth teams.
Several patterns were consistent across the room. Most firms are building wealth teams that are structurally separate from their institutional operations — different people, different processes, different metrics. Most are actively looking to replace their CRM systems, with no one expressing confidence in what they currently use. And nearly all recognized that artificial intelligence is not optional: with so many touchpoints across firms, regions, offices, teams, and individual financial advisors — and so few relationship managers to cover them — AI is the only lever that makes the ratio workable.
Implications
The private wealth channel will sort firms into two groups over the next five years: those who invest early in the infrastructure required to serve it well, and those who treat it as an extension of institutional sales motion and discover it is not.
The difference will not be determined by brand alone. Firms that build structured intelligence on the intermediary landscape, invest in tools purpose-built for the wealth channel rather than adapted from institutional workflows, and commit to genuine investor education will earn the right to grow. Those that move fast without the underlying infrastructure — or without the discipline to only pursue what their firm can genuinely serve — risk the kind of headline that defined the cautionary conversation at Nexus.
The window is open. The capital is coming. The firms that will capture it are the ones treating private wealth not as a distribution opportunity, but as an operational build. That build starts now.
Christopher Cummings is Chief Strategy Officer at InvestorFlow, a platform purpose-built for private markets relationship intelligence and investor engagement. InvestorFlow has spent a decade working with firms across the PEI 300 to build and operationalize their investor coverage models. Learn more at investorflow.com.
Sources
- Fidelity Investments — Individual Investor Allocation to Alternative Assets, 2024
- InvestmentNews — BlackRock Boosts Private Market Ambitions with New Model Portfolios, March 2025
- Boston Consulting Group—Capturing Wealth Management’s $3 Trillion Private Market Opportunity, March 2025.
- Bain & Company—Global Private Equity Report, 2026.
- Wall Street Journal — Blue Owl Fallout Sets Off Retail Investor Panic; Their Advisors Are Urging Calm, 2025
- Private Equity International — 26North’s Josh Harris: Retail Capital Presents ‘Recipe for Problems’, 2026
