Investing in private markets

A holistic approach to your private markets journey.

Private markets have many qualities that make it attractive to investors – including diversification, innovation, and potential for higher growth. However, these markets have several barriers to entry, including challenges around complexity, illiquidity, fees and governance often cited as reasons for not allocating. Whether you’re seeking to better understand the potential for dispersion in performance or reach traditionally hard-to-access managers, we’re here to offer the advice, research and solutions to help you implement a holistic solution that draws on private equity, private debt, co-investment and secondaries, impact and real asset strategies.

What are some common private market investment strategies?

What do I need to consider when investing in private markets?

First, you need to decide how much of your total portfolio you’re comfortable allocating to less liquid, long-term investments. You should consider your ongoing cash flow requirements and recognize that the capital you commit to private market investments will be invested incrementally over time, and you will need to have cash available when a capital call arrives.

In private markets, the difference between the returns made by the best and worst performing asset managers can be considerable and are often much wider than in traditional asset classes. We believe capturing the most attractive opportunities requires active sourcing, research and access to high-quality, specialist private markets asset managers. Asset manager selection is where you need to choose the right collaborator who understands your needs and has the depth of experience to help you implement a private markets solution.

Due to the capital-intensive nature of private market investments, most asset managers focus on a small number of assets in their portfolios. For example, in private equity or infrastructure, there may be as few as ten underlying assets in an individual manager’s fund. Allocating to a range of private markets strategies can help diversify your portfolio by number of underlying investments, manager, strategy, geography and vintage year.

Once you’ve implemented your strategy, we believe it is vital to monitor underlying investments and ensure you are comfortable that your portfolio is on the right track. This is called good governance. It’s particularly critical to assess your liquidity budget and commitment plan on an ongoing basis. This helps keep your strategy and target allocation in line with your desired position.

How we can help you integrate private markets into your investment portfolio

Asset manager research

MercerInsight^® provides institutional investors with access to Mercer’s forward-looking research, including ESG ratings and operational due-diligence reports, along with data and analytics on asset managers and thousands of strategies across public and private markets.
Consulting and advice

Mercer’s private markets specialists bring a holistic perspective to help you define a private markets strategy that is best aligned to your overall investment objectives. We advise on strategy, asset allocation and governance structure.
Investment implementation

We can help you design and execute your private markets investment strategy. Working as an extension of your team, we help you with governance and due diligence, risk mitigation, cost management. We flex our solutions to suit your investment needs.

Get started with private market investing

Why consider private markets?

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Investment strategies that worked in previous cycles may not necessarily work in the future. If you haven't considered private market investments, now is a good time. For investors looking to diversify their portfolios, private market investments play an important role. They offer access to privately negotiated transactions that are not available through public market investments.

Today, for example, there are twice as many private companies operating in the US as there were just 10 years ago. Investors solely focused on public markets may be missing out on these opportunities. Private market investments involve taking direct ownership stakes in privately held companies or hard assets, like airports, telecom towers, real estate, or storage facilities.

Investors can often earn an illiquidity premium, which acts as a reward for allocating their capital over the long term. But accessing these opportunities isn't easy. There are challenges around complexity, illiquidity, fees, and governance.

Mercer's scale enables us to help clients access private equity, private debt, and real asset strategies in a cost-effective way. We believe the best way to capture private market opportunities is to partner with top quartile asset managers.

Our long history and our local presence across the globe gives us access to high-quality opportunities through our network of established relationships. We scrutinize every manager's team, strategy, performance track record, and alignment with investors objectives. And we carefully review their commitment to environmental, social, and governance practice.

Mercer has a long heritage as a trusted advisor and innovator of investment solutions. To implement these solutions, we embed our best research from across the private markets investment spectrum. We then allocate these opportunities to portfolios that are tailored to each client's specific return objectives, cash flow requirements, and risk appetite.

Our flexible approach of offering research, advice, and investment solutions means our clients stay in control of strategic decisions, while enjoying the benefit of rigorous due diligence and expert support. For efficient, cost-effective access to highly-rated private market managers around the world. Connect with us to explore what we can do for you today.

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Building your private markets portfolio

Private market solutions

A holistic approach to your private markets journey.

What are some common private market investment strategies?

What do I need to consider when investing in private markets?

How we can help you integrate private markets into your investment portfolio

Asset manager research

Consulting and advice

Investment implementation

Get started with private market investing

Where next for private markets and hedge funds in 2025?

Optimizing private equity exposure. Strategies for allocating and adjusting commitments

Where is your organization on its alternative investment journey?

Contact us to speak to a private markets’ specialist

Private market solutions

A holistic approach to your private markets journey.

What are some common private market investment strategies?

Co-investments

Impact investing

Private debt

Private equity

Real estate

Infrastructure

Secondaries

What do I need to consider when investing in private markets?

Map out your long-term plan and strategy

Choose your asset managers and secure access

Seek to diversify your allocations

Plan for ongoing commitment

Monitor your portfolio carefully

Undertake due diligence measures

How we can help you integrate private markets into your investment portfolio

Asset manager research

Consulting and advice

Investment implementation

Get started with private market investing

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Where next for private markets and hedge funds in 2025?

Optimizing private equity exposure. Strategies for allocating and adjusting commitments

Where is your organization on its alternative investment journey?

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Contact us to speak to a private markets’ specialist