January 23, 2024 — More than 40% of U.S. and Canadian institutional investors plan to increase allocations to private debt in the next three years and roughly a third plan to grow their private equity holdings overall.

The expected inflows into private debt and equity are part of a broad expansion of private assets within the portfolios of North American investors. Over the past three years, nearly half (47%) of U.S. and Canadian investors raised their long-term target allocations to private equity, and 42% increased allocation targets for private debt, according to new research from Coalition Greenwich. 

Roughly a quarter of these institutions also expanded allocations to each of private real estate equity, private infrastructure equity and venture capital, with smaller percentages growing allocations to private real estate debt and private infrastructure equity. 

“While the move into private assets is a trend spanning institutional investors of all sizes and types, the biggest North American institutions are moving most aggressively to integrate significant private asset exposures into their portfolios,” says Todd Glickson, Head of Investment Management – North America at Coalition Greenwich.

As North American institutions raise their long-term allocation targets for private assets, they are looking to capitalize on what they see as enticing short-term opportunities. In private equity, for example, institutions see buyout and growth investments as particularly attractive. In private debt, institutions are targeting direct lending, distressed debt and special situations.

The 2023 Global Private Markets study results from Coalition Greenwich focus on how institutional investors’ practices and preferences are evolving in a much-changed environment and what asset managers can do to better address investors’ needs in product, distribution, and servicing.