Global asset owners are accelerating their shift towards private markets, strengthening liquidity management and embracing digital assets, even as persistent challenges in data quality, operational complexity, and governance continue to test the industry.

Private market allocations have surged, rising from 86% in 2025 to 94% in the latest survey, according to a study by Northern Trust, Asset Owners in Focus: Global Asset Owner Peer Study 2026.

These findings emerge from the firm’s latest survey of 181 senior institutional asset owners worldwide, spanning sovereign wealth funds, pensions, insurers, endowments, and multi‑manager institutions.

Adoption of private assets is nearly universal across regions, with 95% of survey participants in Asia-Pacific and 98% in North America citing long‑term strategic returns as the primary driver.

However, the expansion into private assets has outpaced internal capabilities of asset owners who face challenges brought on by liquidity constraints, valuation transparency, and entrenched manual processes, the study finds.

Modest growth

Private markets allocations grew modestly during the period ( 13% in 2025 vs. 17% in 2026 ). Despite headlines of sluggish private equity fundraising and private credit liquidity crises, the survey pool of large institutional investors feels confident leaning into multi-decade liability horizons, and many respondents indicate a willingness to tolerate higher levels of illiquidity within long-term portfolio frameworks, according to the survey.

Notably, the size of an institution does not influence propensity to allocate to private markets. Asset owners, whether small ( less than US$10 billion in assets under management ), medium ( US$10 billion to US$25 billion AUM ), or large ( over US$25 billion AUM ), all cluster around the same 16-18% allocation range, underscoring the broad institutional appeal of private markets, the study says.

The top private market asset classes cited by the asset owners are private equity ( 86% ), real estate ( 82% ), private credit ( 78% ), as well as natural resources and energy ( 69% ).

Even as the asset class continues to expand its role in asset owners' portfolios, long-known challenges in managing these allocations persist. Globally, but even more notably in North America, the near majority of asset owners point to operational complexity, liquidity concerns, and valuation transparency as top challenges in managing their private markets portfolios.

In addition to operational challenges, nearly one-third of respondents say they struggle to access desired funds and asset managers ( 31% in 2026, up significantly from 18% in the previous year ).

“The challenge likely manifests most noticeably in the private markets realm, where demand for top strategies often outpaces available access due to factors like infrequent fundraising windows, longstanding manager relationships, and high capital commitment requirements,” the study says.

Deliberate allocations

In an interview with The Asset, Yen Leng Ong, head of Southeast Asia at Northern Trust, says: “Complexity is given, because private assets are unique deal by deal. Data quality and timeliness are still major hurdles.”

She stresses that true efficiency gains will require fundamental infrastructure change, particularly wider adoption of blockchain to improve transparency and operational workflows.

“What we’re seeing in APAC isn’t a retreat from private markets, but a more measured pace. Allocations are becoming increasingly deliberate, shaped by uncertainty and liquidity considerations rather than a broad push to increase exposure,” Ong notes.

Liquidity has become a central concern, with 63% of APAC respondents and 60% globally ranking it as increasingly important. In Malaysia, for example, allocations skew heavily towards fixed income ( 44% ) and cash ( 30% ), reflecting both regulatory nuances and market realities, she notes.

Cash holdings are often tied to settlement requirements in markets like China A‑Share Connect or reserved for private market capital calls. Asset owners are increasingly redeploying idle balances into money market funds and treasury bills to capture short‑term yield.

“Day‑to‑day portfolio construction doesn’t change, but cash deployment strategies do. Rebalancing now occurs more often when volatility or operational constraints disrupt strategic allocations,” Ong explains.

Asset service providers are responding with faster FX conversion and componentized outsourcing of trade execution, underscoring the operational adjustments required to support liquidity reprioritization.

Rise of digital assets

Also, digital assets are becoming a core asset, with nearly half ( 46% ) of surveyed asset owners reporting direct cryptocurrency exposure, while 35% invest in blockchain infrastructure.

Investments in digital assets are no longer exploratory. “It’s a real asset class on its own. Crypto is not listed, it’s not private, it sits as a distinct category,” she says.

However, risk appetite for digital assets varies, with regulatory uncertainty and valuation challenges still prominent. Yet institutional adoption signals a structural shift. Stablecoins and tokenization are expected to gain traction as regulatory frameworks mature, offering more predictable risk profiles than volatile cryptocurrencies.

The survey highlights strong expectations for artificial intelligence, particularly in KYC, research, and documentation. Current applications remain basic, but asset owners anticipate meaningful productivity gains within 12-18 months.

Ong stresses that successful use of AI in asset servicing hinges on talent: “Knowledge of asset servicing is niche. AI expertise is rising, but the key is convergence, which means merging AI skills with asset servicing know‑how.

“APAC’s younger demographics and faster adoption curve provide an advantage, though integration remains incomplete. The challenge is not a shortage of talent per se but aligning parallel pools of expertise into effective use cases.”

Data has emerged as both a critical enabler and a limiting factor. Asset owners cite accuracy, timeliness, and integration across listed and private mandates as persistent obstacles. In APAC, fragmented systems and geopolitical uncertainty exacerbate the challenge.

Geopolitical concerns

Geopolitical instability dominates risk concerns, with 75% of global respondents and 81% in North America citing it as their top challenge. Asset owners are rebalancing portfolios more frequently, abandoning reliance on historical models. Ong compares the environment to “navigating rapids”, where agility is essential.

“Organizational agility”, defined as the ability to adapt quickly to macro shifts, is increasingly seen as a differentiator.

While only the most sophisticated institutions have achieved it, the survey suggests that agility will become a baseline requirement for large asset owners facing volatile markets.

Finally, the survey underscores the evolution of custodians into full asset service providers. Traditional safekeeping has expanded into data integration, digital asset infrastructure, middle‑office outsourcing, fund administration, FX, brokerage, and securities lending.