Blackrock Sees EMEA Moving Into Private Assets

BlackRock has warned that investors across Europe, the Middle East and Africa are reshaping portfolios in response to what it describes as a lasting shift towards more volatile markets, accelerating a move into private assets as confidence in traditional diversification weakens.

The world’s largest asset manager says institutions in the region are reassessing long-held assumptions about the stabilising role of bonds and listed equities, following repeated market shocks driven by geopolitics, policy uncertainty and abrupt changes in trade relations.

According to BlackRock, clients in Europe, the Middle East and Africa accounted for around 35 per cent of the group’s private market fundraising last year. The amount raised from the region rose by more than half compared with 2024, highlighting how quickly institutional attitudes are shifting.

Dominik Rohé, BlackRock’s deputy head of international business, said the move reflected a growing recognition that market behaviour has changed in ways that are unlikely to reverse. “European institutions are allocating more to private markets as they recognise that we are in a new regime with higher volatility and different correlations between bonds and equities,” he said.

For decades, pension funds and insurers relied on a relatively predictable relationship between asset classes, with government bonds expected to cushion equity losses during periods of stress. That assumption has been undermined by episodes in which both stocks and bonds have fallen sharply at the same time, leaving investors exposed.

Last year’s swings in global markets reinforced those concerns. Heightened geopolitical tension, uncertainty over interest rates and renewed trade disruption contributed to sharp bouts of volatility, including a sell-off in equities following tariff announcements by US President Donald Trump on what he dubbed “liberation day”.

While equity markets ultimately pushed to record highs, the path was uneven. For many institutional investors, the experience strengthened the case for assets whose returns are less tightly linked to daily moves in public markets.

Private credit, infrastructure and other illiquid strategies have been among the main beneficiaries. These assets are typically valued less frequently than listed securities and are often backed by long-term contracts or cash-generative businesses, attributes that appeal to investors seeking steadier income and diversification.

Rohé said institutions were also drawn by the opportunity to gain early exposure to areas shaping future growth, including infrastructure underpinning artificial intelligence and companies choosing to remain private for longer. Across the EU and UK, more than 90 per cent of companies with annual revenues above $100mn are privately held, limiting the range of opportunities available in public markets alone.

BlackRock has been positioning itself to capture this shift. Over the past two years, it has completed a string of acquisitions to expand its private markets platform, including infrastructure specialist Global Infrastructure Partners, private credit firm HPS Investment Partners and data provider Preqin.

The group has set an ambitious target of raising $400bn for private markets by 2030. It already manages $322.6bn in private assets, making the unit one of the largest of its kind globally.

Recent figures suggest momentum is building. In the three months to the end of the last quarter, BlackRock attracted $7.2bn into private credit strategies and close to $5bn into infrastructure investments. Overall assets under management reached a record $14tn, supported by inflows into both equity and fixed-income funds.

Yet Rohé was careful to temper enthusiasm with caution. While private markets are often perceived as less volatile, he warned that this impression can be misleading. “Private markets can be more opaque to evaluate,” he said, noting that infrequent pricing does not eliminate risk but can obscure it.

Liquidity remains a central concern. Unlike listed securities, private assets cannot always be sold quickly or at transparent prices, particularly during periods of market stress. For investors with short-term cash needs or strict liquidity requirements, this can pose challenges.

Regulators and policymakers are also paying closer attention to the rapid expansion of private markets, questioning whether risks are being fully understood as capital flows into increasingly complex structures. For asset managers, the challenge lies in balancing growth with transparency and governance.

Despite these caveats, demand shows little sign of slowing. Many European pension funds face long-term liabilities that require predictable income streams, at a time when yields on traditional government bonds remain uncertain. Infrastructure assets, in particular, are seen as a way to match long-dated obligations while supporting essential services.

Private credit has also gained traction as banks retreat from certain forms of lending under tighter capital rules. Non-bank lenders have stepped in to fill the gap, offering financing to mid-sized companies at attractive spreads, though often with higher risk.

The broader backdrop suggests the shift may be structural rather than cyclical. Trade policy remains unpredictable, monetary policy is navigating an uncertain path and geopolitical tensions show little sign of easing. For many investors, reliance on a narrow set of public markets feels increasingly exposed.

BlackRock’s view is that diversification now requires a broader toolkit. As correlations between traditional assets become less reliable, institutions are looking beyond listed markets to build resilience into portfolios.

Whether private markets deliver on those expectations will depend on performance through the next period of stress. For now, the trend is clear: Europe, the Middle East and Africa are no longer tentative adopters but central drivers of growth in an asset class that is reshaping global investment strategies.