Investors are turning to private assets for growth, access, and stability.
Dubai: Private markets are capturing increasing investor focus, with more capital flowing into assets beyond traditional stocks and bonds. An increasing number of companies are staying private for longer periods, reshaping where and how value is generated.
This shift is influencing how investors construct their portfolios. While public markets still provide liquidity and transparency, private markets offer access to earlier stages of business growth and a broader spectrum of sectors.
Access comes with trade-offs
The contrast between public and private markets is evident in how investors engage. Public markets offer easy entry and exit, along with regular pricing and disclosure, while private markets involve longer investment horizons and less frequent liquidity.
“Public markets offer liquidity and transparency, whereas private markets provide long-term capital, control, and return potential,” said Tajinder Virk, Co-founder and Group CEO of Finvasia.
Private investments often require capital to remain tied up for several years, with limited exit options. In return, investors gain access to companies and assets not available on public exchanges.
More value sits outside public markets
A significant portion of economic activity now occurs within private companies. Many firms are delaying or forgoing public listings, keeping growth within private ownership structures.
Globally, private market assets under management have surpassed $13 trillion, backed by institutional investors such as sovereign wealth funds, pension funds, and large family offices.
“Private markets are moving from being an alternative allocation to a core component of global portfolios,” said Tajinder Virk.
Investor interest is fueled by the potential for diversification, attractive returns, and access to sectors that are less accessible through public markets.
Middle East investors step up allocations
In the Middle East, engagement in private markets has been steadily increasing. Sovereign wealth funds and large family offices are actively participating in global deals, often committing substantial capital.
Recent transactions underscore this trend, with regional investors playing key roles in major international deals and forming partnerships across private credit, infrastructure, and private equity.
“The ecosystem is smaller than in the US or Europe, but it is more agile, with quicker decision-making and rising participation from global fund managers,” Virk said.
Saudi Arabia and the UAE remain at the forefront of activity, backed by economic diversification programs and ample liquidity.
Growth spreads across segments
Multiple areas within private markets are experiencing strong momentum. Private credit, in particular, has expanded rapidly, driven by demand for flexible financing and constrained lending from traditional banks.
The sector now encompasses a broad range of strategies, including asset-backed lending and infrastructure-focused financing.
Infrastructure investment is also on the rise, fueled by demand for energy projects, transport networks, and digital systems such as data centres.
Private equity and venture capital remain active, especially in technology and innovation-driven sectors, though investors are increasingly selective.
Filling gaps in the financial system
Private markets complement banks and public markets by providing long-term capital to businesses and projects.
They support companies at various stages, from early development to expansion, and help finance large-scale infrastructure initiatives.
“Private capital supports businesses before they are ready for public markets, fostering innovation, job creation, and economic growth,” Virk said.
Flexible deal structures enable investors to customize financing to the specific needs of each project or borrower.
Risks remain part of the picture
Investing in private markets requires careful consideration. Limited liquidity means capital is tied up for extended periods, and valuation methods can differ across funds and strategies.
Access is often restricted, with participation mainly limited to institutional and professional investors.
As the market expands, focus is increasingly on governance standards, reporting, and methods to enhance liquidity without altering the long-term nature of private assets.
A bigger role in global portfolios
Private markets are gaining prominence in capital allocation, both globally and in the Middle East. Investors are looking beyond public markets to access a broader range of opportunities.
In the region, abundant capital and ongoing investment initiatives are fueling this trend, with private markets playing a growing role in funding growth across sectors. The balance between public and private markets continues to evolve, each serving a distinct role in the investment landscape.
