Product strategy comes first in Europe’s new private markets landscape

Ankit Jain, Group Head of Private Markets

For years, private markets product development followed a familiar path. Managers built an investment strategy, established a fund structure and took it to market. Commercial success depended on the quality of the underlying assets, the strengths of the investment team and their fundraising ability. Product design was important, but was largely a means of delivering an investment proposition rather than differentiating it.

That hierarchy is beginning to shift in Europe. Private wealth is becoming a more significant source of capital. Distribution channels are broadening. Product structures continue to evolve. Regulation is creating new opportunities to reach investors without changing the underlying investment strategy. None of these developments alter the fundamentals of private investing. They do, however, expand the choices managers face when deciding how to package, position and distribute their products.

For US managers considering their next move in Europe, that has important implications. The discussion is no longer confined to which domicile to choose or which regulatory framework to adopt. Increasingly, competitive advantage is being shaped much earlier, at the point where product strategy and commercial strategy intersect.

Product strategy now starts with the investor

Institutional investors, private wealth clients and retail investors all bring different expectations around liquidity, accessibility, reporting and investment horizons. Rather than adapting products to accommodate those expectations later, leading managers are designing around them from the very beginning.

Product strategy has become the discipline of matching investment capabilities to the needs of a clearly defined audience, recognising that the same investment proposition may require different product solutions depending on who it is intended to serve.

That shift is changing the role product strategy plays within a business. It no longer sits solely within product development or legal teams. It has become an important commercial decision, shaping how managers position products, access new distribution channels and plan for long-term growth.

Every product decision creates a trade-off

Greater liquidity may broaden investor access but increase operational complexity. Lower minimum investment thresholds can expand the addressable market while changing servicing requirements. Greater flexibility may appeal to investors while introducing additional governance and oversight considerations. Even seemingly straightforward decisions around valuation frequency or redemption terms need to reflect what the underlying assets can realistically support.

Successful product design is not about maximising any single characteristic. It is about understanding where those trade-offs exist and building products that remain true to the investment strategy while meeting evolving investor expectations.

Europe rewards products built for their intended market

One of the most common assumptions among managers entering Europe is that a successful domestic product can be replicated in another jurisdiction. In practice, the investment proposition often travels more easily than the product that delivers it.

A strategy designed for US institutional investors may need different liquidity terms, reporting standards or minimum investment thresholds to appeal to European wealth managers or family offices.

Drawing on Carne’s experience supporting more than 200 European semi-liquid fund launches, the strongest products tend to share a common characteristic. Managers preserve the integrity of their investment strategy while adapting the product around the expectations of a different market.

For some firms, that means establishing Luxembourg feeder funds into established US master funds, giving European investors access to proven investment strategies through structures that are familiar within the local market. For others, it means adapting US private credit strategies into Luxembourg semi-liquid vehicles, broadening access to private markets while retaining the same underlying investment philosophy.

The investment strategy often changes very little. The product surrounding it changes considerably. Those examples illustrate a broader point. Successful European launches rarely begin by asking how an existing product can be replicated. They begin by asking how an investment strategy can be presented in a way that reflects European investor expectations, distribution opportunities and long-term commercial ambitions.

These considerations sit at the heart of the first chapter of the Private Guide – available in two versions for managers new to Europe and for established operators considering European expansion. It explores how leading managers are approaching product strategy in European private markets, from identifying the right investor audience to selecting structures that support long-term commercial ambitions.

Download chapter one to start building your Private Guide.