Aberdeen sets out 8 point plan to make private markets work for public good
13 October 2025
• Private markets can boost returns from retirement pots and provide much-needed diversification, Aberdeen research shows – but diversification is crucial.
• A diversified private markets basket of shares would have outperformed a 60/40 strategy by 100 percentage points over the past 18 years, Aberdeen research shows.
Currently, millions of savers face the prospect of inadequate retirement incomes, with traditional 60/40 portfolios under pressure in a low-yield, high-volatility environment. So, it’s no surprise to see private markets gaining traction, both at a policy and asset management level.
In a new paper - 'Private market for public good: the opportunities and barriers to democratisation’, published today, Aberdeen, the specialist asset manager, suggests that giving individuals greater access to private markets 1 could potentially transform lives. Greater transparency and conversations about risk and value for money will be crucial to success.
Aberdeen is not suggesting that traditional portfolios blending investments in equities and bonds should be replaced. But Aberdeen does believe there is a real place for private markets in more portfolios.
Yet without addressing barriers such as transparency, benchmarking, and access, the benefits of private markets will remain out of reach for most individuals.
Aberdeen’s 8-point plan calls for higher standards of disclosure across private markets as well as for a product neutral approach from Government, given that some vehicles will work better for certain types of investor than others.
Furthermore, while there is room for private markets in ISA portfolios, as per Chancellor Rachel Reeves’ recent Mansion House speech regarding LTAFs, pensions remain the ultimate wrapper due to their ultra long-term nature.
In a new Aberdeen paper - Private market for public good: the opportunities and barriers to democratisation’, private markets have outperformed a traditional portfolio of 60% equities and 40% bonds significantly since 2007
A diversified, equally weighted basket of private market assets would have delivered a total return of 370% between Q2 2007 and the end of Q1 2025, whereas a 60/40 portfolio would have seen a 268% increase over the same time period . However, it is important to remember past performance is no guarantee of the future.
Looking over the past 18 years to include the global financial crisis, Aberdeen, using data from MSCI Burgiss, constructed a portfolio equally weighted across private equity buyout, venture capital, real estate, infrastructure, natural resources and private credit.
How have private markets performed vs a 60:40 portfolio since 2007?
Data source: MSCI, Bloomberg, Aberdeen. Figures up to 31/03/2025. Past performance is no guide to the future.
Xavier Meyer, CEO at Aberdeen Investments, said: “Private markets have huge potential to transform the lives of investors, as well as channelling investment into public services. But there are significant barriers to overcome.
“The everyday investor must remain at the heart of our thinking on private markets. That mindset was key to creating the 8-point plan we set out today. If we are to help ensure people benefit from the long-term potential of private markets, then pensions have to be front and centre. But running alongside that we need to tackle head on the issue of risk versus reward and value for money – conversations that can only happen if we also significantly improve transparency.”
Nalaka De Silva, Head of Private Markets Solutions at Aberdeen Investments, said: “Millions of people around the world are forecast to have an insufficient income in retirement due to low levels of pension savings.
“So it’s no surprise that attention has turned to the benefits private markets can offer. Their long-term nature of private market investments, even versus publicly listed shares or bonds, should mean investors can demand a higher level of return over the very long term.
“But the risks entailed by private markets is very different, and we are not suggesting that traditional portfolios blending investments in equities and bonds should be replaced. Every private
The barriers
Aberdeen’s report found significant challenges that could block this further democratisation of private markets. These include:
• Big variations in performance among managers
• Confusion around how returns are reported
• A lack of reliable benchmarking and reporting of data
• Low levels of transparency around how private market assets are valued
• Inconsistencies in how fees are reported
• The lack of daily dealing available with products such as LTAFs and ELTIFs.
Aberdeen’s 8-point plan for making private markets work for public good
- Introduce a standardised template for reporting performance. This should include a time-weighted return as well as the IRR so investors can more easily compare returns with public market funds. Standardised reporting of performance should also mean that more reliable benchmarks can be created to compare returns of private market funds.
- Encourage greater transparency and levels of disclosure among private market funds, including over assets held, risk management strategies and how assets are being valued.
- Establish a gold standard for valuing private market assets covering how a private asset should be valued, how frequently and who will value it. This could take inspiration from the model that already exists in the real estate industry, overseen by RICS. We would also support the introduction of kite mark for private market funds showing that they follow “gold standard” practices for valuing their assets.
- Industry will need to collaborate to develop ways of integrating private market funds which cannot be traded daily into mainstream investment platforms and managed portfolios which are currently set up for daily dealing.
- Have an open and honest conversation about risk and reward. The risks of private markets investing are inherently different to those of public markets and investors should go in with their eyes open.
- Push forward conversations about value for money and introduce a standardised cost disclosure framework for both funds and funds of funds within private markets. The latter should easily allow investors to compare net-of-fee returns with public market equivalents.
- Countries should consider creating their own national taskforces to coordinate these conversations and deliver impactful education campaigns around private markets investing.
- Ensure a product-neutral approach is taken when it comes to policy and regulation - an approach which understands that some vehicles will work better for certain types of investors than others.
John McCareins, Chief Client Officer, Aberdeen Investments, says: “A small though growing amount of private market assets is held by individual investors. In the UK, the investment trust sector is a case in point, with retail investors owning 7% of the infrastructure sector, 15% in renewable energy, and 9% in private equity, according to the AIC, the industry trade body.
“As an increasing number of companies go private or remain private, it will become harder for investors to access growth opportunities via public markets alone. It’s hardly surprising then that we have seen many asset managers snapping up specialist private market companies.
“From liquidity to transparency, benchmarking challenges, and higher fees, the barriers to widespread retail access are plentiful. But at Aberdeen we do not see them as insurmountable. What we do need to see from Governments is a product-neutral approach to policy and regulation - an approach which understands that some vehicles will work better for certain types of investors than others.”
Alongside its sizeable public markets investments, Aberdeen has been a long-term investor into private markets since 1973. Over time, it has evolved its capabilities and now has £68.8bn of assets under management (AUM) across real assets, private credit and alternative investment solutions (as at 30 June 2025). This includes Aberdeen’s specialist private market solutions team, who invest in a diverse range of private assets across the world via its Global Private Markets Fund (GPMF).
1. Aberdeen defines private market investments as investments into privately owned structures, with the main sub-segments being: private equity, infrastructure, real estate, private credit and natural resources.
2. Using data from MSCI, we constructed a private markets portfolio equally weighted across the main private asset classes: private equity, venture capital, both value-add and opportunistic real estate, infrastructure, natural resources and private credit. We then compared the performance of this portfolio with a traditional 60/40 portfolio (60% equities using the MSCI World Index; 40% bonds using the Bloomberg Global Aggregate Index).
3.Internal Rate of Return – the most common way of reporting returns in private markets. NB: an IRR of 33% does not mean the value of your money has grown by a third.
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About Aberdeen Investments
• Aberdeen is a global investment company that helps clients and customers plan, save, and invest for the future. Our purpose is to enable our clients to be better investors.
• Aberdeen manages and administers £517.6bn worth of assets for clients (as at 30 June 2025).
• Our strategy is to deliver client-led growth. We are structured around three businesses – Investments, Adviser and ii – focused on the changing needs of our clients.
• The capabilities in our Investments business are built on the strength of our insight – generated from wide-ranging research, worldwide investment expertise and local market knowledge.
• Our teams collaborate across regions, asset classes and specialisms, connecting diverse perspectives and working with clients to identify investment opportunities that suit their needs.
• As at 30 June 2025, our Investments business manages £367.9bn on behalf of clients - including insurance companies, sovereign wealth funds, independent wealth managers, pension funds, platforms, banks and family offices.
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