2025 Private Markets Rebound: Infrastructure Leads, AI-Driven VC Draws Investor Focus

Recent market intelligence from Preqin, a part of BlackRock, reveals a robust recovery trajectory across major private markets segments in 2025, with infrastructure and private credit emerging as standout performers despite persistent challenges in venture capital fundraising.

Infrastructure Accelerates: A 70% Surge Reshapes Capital Allocation

The infrastructure asset class demonstrated exceptional momentum, posting a 70% year-on-year capital raise increase during the first three quarters of 2025. This marked a watershed moment—infrastructure became the only private markets segment to exceed its entire 2024 full-year fundraising total within just nine months. Performance metrics reinforced investor confidence, with annualized returns ranging from 9% to 11% across one-, three-, and five-year periods ending June 2025, positioning infrastructure as the top-tier performer within the broader private markets ecosystem.

Mega-fund formations dominated the landscape, attracting institutional capital seeking stable, long-term yield profiles. According to Preqin’s proprietary investor sentiment tracking, 40% of institutional participants plan to increase their infrastructure commitments over the next 12 months, with Western Europe commanding the highest attractiveness ratings on Preqin’s Investor Sentiment Index.

Private Credit Shifts Geography: Europe’s 46% Share Signals Strategic Reallocation

European-focused private credit funds captured nearly half of all fundraising activity in the first nine months of 2025—a dramatic reversal from 23% in 2024. Direct lending strategies dominated this expansion, accounting for 61.5% of capital deployment, while distressed and special situations plays gained considerable traction.

This geographic reorientation reflects investor appetite for higher-yield opportunities in restructuring-friendly environments. Preqin’s survey data indicates 81% of institutional investors intend to maintain or increase private credit allocations, making it the most conviction-driven asset class heading into 2026. Distressed and asset-backed lending are forecast as the fastest-expanding subsectors.

Private Equity Liquidity Play: Secondaries Double Historical Averages

Global private equity fundraising reached $507 billion across Q1-Q3 2025, representing 73% of the prior year’s full total. The most notable shift occurred within the secondaries segment, which captured 15% of all PE fundraising—nearly double the five-year historical average. This surge reflects institutional investor demand for liquidity events and the potential for discounted entry points that enhance long-term returns.

However, exit velocity remains contested terrain. While 80% of surveyed investors identified exit activity as a primary concern for the coming 12 months, the asset class is still projected to outperform public markets over extended horizons, driven by its structural advantage in supporting high-performing enterprise portfolios.

Real Estate Stabilizes: North America Gains Edge as Rate Expectations Shift

Global real estate fundraising accumulated $127 billion in the first three quarters of 2025, nearly matching the entire 2024 full-year performance. North America’s share of global deal value expanded as transaction closure velocity accelerated, buoyed by market expectations surrounding interest rate cuts.

Opportunistic strategies emerged as standout performers within the asset class. Yet investor sentiment remains bifurcated—30% plan to reduce commitments while 27% plan to increase, with 64% citing persistent interest rate uncertainty as their dominant concern. Europe and Asia-Pacific regions are positioned to lead the 2026 real estate recovery, according to Preqin’s predictive analysis.

Venture Capital: AI Phenomenon Masks Fundraising Headwinds

Artificial intelligence dominated venture capital deal composition in 2025, accounting for over 50% of aggregate VC transaction value during the nine-month period. This concentration underscores venture capital’s critical role as a gateway technology for institutional investors seeking exposure to emerging AI infrastructure and applications.

Exit momentum showed tangible improvement, with $171 billion deployed through Q3 2025—the strongest performance since 2021. Yet fundraising remains subdued at $64.4 billion year-to-date, representing just 48% of 2024’s comparable total. AI, fintech, and healthtech are expected to dominate investment themes throughout 2026, though capital formation challenges persist.

Institutional Outlook: Conviction Splits Across Asset Classes

Preqin’s survey of 435 institutional participants—encompassing fund managers and limited partners—reveals divergent conviction levels heading into 2026. Infrastructure commands the highest investor sentiment index ranking, while private credit maintains the broadest commitment expansion intentions. Venture capital fundraising difficulties persist despite improved exit pathways, signaling a structural reset in LP allocation preferences within the broader private markets landscape.

For detailed analysis and comprehensive market intelligence, Preqin Insights+ subscribers access the complete 2025 Global Reports series covering all five major private markets asset classes. Industry professionals interested in summary versions can register through Preqin’s platform.