Supermodel 2025: Europe’s wealth awakening and the private markets pivot

Clair Turketo, Managing Director, Client Solutions

The search for growth in asset management is gathering speed – and it’s pointing squarely towards Europe, private markets and the wealth segment.

According to our latest Supermodel 2025 findings, 41% of firms now identify expanding distribution in Europe as a high-priority strategy for the next 12 months, up from 34% in 2024. Among US-headquartered managers, that figure has increased 45%. Faced with tightening margins and saturation in traditional markets, managers are more focused on the regions and investor segments that offer the greatest potential and that has led to more fundraising activity in Europe.

Europe is the focal point

Global managers are recalibrating their distribution strategies. While the US remains a critical market, many firms are now shifting their fundraising and product development priorities toward Europe, which offers both structural growth potential and regulatory momentum.

Several factors are driving this: the progress of democratization initiatives such as ELTIF 2.0 and relatedly, the UK’s LTAF regime, greater regional divergence in sustainable investment demand, and, at times, a more predictable economic outlook compared to the US.

As trade and tariff uncertainty continues to weigh on the US economy, managers are diversifying their markets. For many, Europe now represents the most scalable route for launching new products – particularly in evergreen private markets funds and active ETFs.

Private markets go mainstream

Nowhere is this shift more visible than in private markets. Global private markets assets under management (AUM) have more than doubled in four years, rising from $7.4 trillion in 2019 to $15.1 trillion by Q4 2023.[1] Private credit alone reached the $2 trillion mark last year.[2]

What began as a diversification play has evolved into a structural transformation of the asset management landscape. Some 40% of managers in our survey plan to launch funds in entirely new private market asset classes over the next two years – a sign that private markets are becoming central to long-term growth strategies rather than a peripheral allocation. And most firms we surveyed think US tariff policy has accelerated the race to increase European fundraising, particularly among affluent investors, for private markets funds.

Wealth opens up a new frontier

The majority of traditional managers (61%) and alternative managers (59%) tell us the European wealth segment is now a high-priority channel for attracting new flows into private markets products over the next two years.

This marks a profound change in emphasis. While institutional investors continue to provide scale, wealth clients – intermediated through private banks and advisers – represent the next opportunity for long-term growth. .

However, this opportunity comes at the cost of significant complexity. The wealth market is labour intensive, requiring high-touch service and thorough client education. That all means that firms wishing to play in this segment must invest in their data, client servicing and operational resilience. To succeed, they must scale efficiently, and have sufficient brand strength to translate private markets strategies into formats that wealth clients can access and understand.

“Democratization” has given managers a broader reach

Recent regulatory reforms are widening access to private markets in Europe, only adding to its current attractiveness. The revised ELTIF 2.0 regime and the UK’s LTAF framework have created new vehicles to make private markets more accessible to retail investors.

Managers are beginning to capitalize on these changes. Research from Novantigo shows evergreen private markets funds in Europe reached €63 billion AUM at the end of 2024, up more than 60% year-on-year.[3]

These democratization efforts are doing more than expanding access; they’re reshaping how products are structured, distributed and serviced.. As these fund types mature, they are expected to become a cornerstone of wealth and retirement products, including decumulation strategies for direct contribution (DC) pension fund investors seeking the potential for higher returns in private markets.

The opportunity – and the challenge – ahead

Europe’s combination of evolving fund structures, growing wealth concentration and investor appetite for diversification presents an unprecedented opening for global asset managers.

But competition will be fierce. Capturing the wealth opportunity in private markets requires education, infrastructure and resilience – qualities that will separate early winners from those still adapting to the demands of a new distribution paradigm.

For an industry seeking to spark growth amid volatility, the message from Supermodel 2025 is clear: the next chapter will be written at the intersection of Europe, private markets and wealth.

Hear more from the asset managers we surveyed – including the operational drivers they are using to enable that expansion – in our full Supermodel 2025 report. Download the report now.

All references are to Supermodel 2025 data, unless otherwise given.

[1] Preqin data; Carne Group analysis as the source

[2] The rise and risks of private credit, International Monetary Fund, April 2024

[3] European evergreen funds market projected to exceed €240bn by 2029, Citywire, April 2025