Slide 1: Private Assets: From Afterthought to Anchor in Wealth Management
Private Assets: From Afterthought to Anchor in Wealth Management October 2025 © 2025 MSCI Inc. All rights reserved. Please refer to the disclaimer at the end of this document.
Slide 2: Investment Trends for Wealth Managers
Investment Trends for Wealth Managers Kuldeep Yadav | Vice President, Research & Development Information Classification: GENERAL
Slide 3: Key investment themes for Wealth Managers
Key investment themes for Wealth Managers U.S. policy could further deepen economic divergence Regional Diversification in a Tripolar World Rising Allocation to Private Markets Total Portfolio Approach for Wealth Managers Information Classification: GENERAL
Slide 4: “Long America” in multi-asset portfolios
“Long America” in multi-asset portfolios In many ways, U.S. exposure has become the default allocation MSCI Global Fixed Income and Global Equity weights based on either USD-denominated debt or U.S. capitalization. Private asset weights based on MSCI Private Capital Solutions indexes. Information Cl
Slide 5: U.S. policy could further deepen economic divergence
U.S. policy could further deepen economic divergence Information Classification: GENERAL
Slide 6: Long-End Yields Reprice Fiscal Risk as Gold Climbs
Long-End Yields Reprice Fiscal Risk as Gold Climbs • Long-term bond yields hit multi-year highs despite rate cuts, driven by fiscal risks, heavy issuance, and inflation uncertainty, with U.S., Europe, UK, and Japan showing sharp yield curve back-end moves. • Gold defied negative yield sensitivity, r
Slide 7: The Price of US Exceptionalism
The Price of US Exceptionalism • Since the GFC, U.S. large caps drove widening profitability and productivity, doubling sales per employee, accelerating R&D, and sustaining higher profit shares versus ex-U.S. markets, consistent with the “superstar firm” effect. • Since the GFC, U.S. firms - especia
Slide 8: Tripolar world
Tripolar world • Regional betas now cluster into clearer U.S., Europe and EM camps than in 2010 — a shift that restores global- diversification benefits lost right after the GFC. • Country nuances: Canada’s links pull it nearer the U.S./Europe; China stands out as distinctly EM; Japan, Australia and
Slide 9: Rising Allocation to Private Markets
Rising Allocation to Private Markets Information Classification: GENERAL
Slide 10: Interest in Private Markets is growing…
Interest in Private Markets is growing… Plans to increase allocations over the next 3 years →Private investments offer potential income streams with lower correlations to the public equity and bond markets →These markets can be very opaque, with less visibility into investment opportunities and much
Slide 11: … But so are the questions
… But so are the questions →Wealth managers are trying to learn about Private Barriers to Increasing Allocations Markets at the same time they are fielding questions from their clients: →Basic Questions might include: →What are the different types of strategy? →‘What sort of return could I expect?’
Slide 12: Fund Strategies and Return Distributions
Fund Strategies and Return Distributions →Historical Distribution of Return by Fund Strategy: →Private Equity divided into two strategies: Venture Capital and Buyout. Venture Capital strategies invest in early-stage and high-growth startups, while Buyouts involve acquiring control of mature, cash-ge
Slide 13: Private Markets: Timeframes
Private Markets: Timeframes The ‘J-Curve’: Cumulative Net Cashflows by Year →Investors in Private Markets refer to the ‘J-curve’ to understand cashflows from their investments →Private investments typically involve capital drawdowns initially, with investments beginning to mature after a few years →
Slide 14: Total Portfolio Approach for Wealth Managers
Total Portfolio Approach for Wealth Managers Information Classification: GENERAL
Slide 15: Factors provide a common lens to understand behavior
Factors provide a common lens to understand behavior →Factor models helps identify a set of common factors that explain portfolio risk and return →MAC model breaks risk down into common factors and security specific risk →Factors are estimated from time series data from financial markets Note: Portf
Slide 16: Identifying common drivers of risk and return
Identifying common drivers of risk and return → Factors like interest rates, Historical Performance of the MSCI World Private Equity Return Tracker Index vs global private equity inflation, country or industry are and global public equities broad economic exposures that are universal across public e
Slide 17: Correlation Matrix for Total Portfolio Allocation
Correlation Matrix for Total Portfolio Allocation Low-to-moderate correlations Correlation Matrix of Markets in the Investment Universe between private and public markets → Mid- and large-cap U.S. stocks show high correlations with U.S. small-cap stocks → Private credit has some overlap with high yi
Slide 18: The Strategic Role of Private Assets
The Strategic Role of Private Assets Including private markets in the Efficient frontiers corresponding to different private-market exposures investment universe expands the efficient frontier of risk- adjusted returns, but at the cost of: → Increased illiquidity → Valuation complexity → Challenges
Slide 19: Constructing the diversifying portfolio
Constructing the diversifying portfolio The diversifying portfolio is built with a deep understanding of the risk factors and economic exposures present in the core holdings. → Modeling the core private holdings → Complement existing core private-asset exposure Note: Portfolio risk is estimated usin
Slide 20: Practitioner’s View on Integrating Private Assets in Wealth Management
Practitioner’s View on Integrating Private Assets in Wealth Management Hassan Suffyan | Head of Wealth Segment, EMEA & APAC Information Classification: GENERAL
Slide 21: The Portfolio Management Journey: A Recap
The Portfolio Management Journey: A Recap Return Translating Theoretical Performance AA/BMRK Optimisation into Client Performance & Efficient Frontier Creation Single Asset Class Models € ESG Child Model Efficient Portfolio Optimisation (i.e. min TE) Portfolio Frontier (i.e. US Equity) Medium Risk C
Slide 22: The Benchmark Blindspot
The Benchmark Blindspot Most Strategic Asset Allocations (SAAs) today primarily benchmark against public market assets. This creates a "blind spot" where private asset allocations are often seen as tactical deviations rather than core strategic components, which in turn consumes precious tracking er
Slide 23: Pathways to Private Market Exposure: A Recap
Pathways to Private Market Exposure: A Recap Evergreen Fund Raising Investment Frequent capital contributions & retrieval Distributions Distributions Distributions Portfolio Lockup Period Open to 2-4 Years Redemptions Fund Raising Investment LP / Close Ended Single, large capital Distributions Distr
Slide 24: Manager Research & Selection: LPs vs. Evergreens
Manager Research & Selection: LPs vs. Evergreens LP Funds (Closed-End) Evergreen Funds (Open-Ended) Due Diligence Focus Due Diligence Focus Manager selection drives most dispersion — high impact from team skill, deal flow, and vintage. Blend of public and private exposure — performance influenced by
Slide 25: The Real-World Challenge of Model Portfolios: Combining Public and Private Markets
The Real-World Challenge of Model Portfolios: Combining Public and Private Markets Model Design Advisor Implementation Client Portfolio Delivery Integrating Public & Private Markets Turning the Model into Advice Delivering Outcomes to Clients • Different valuation frequencies, benchmarks, • Managing
Slide 26: The Partnership Imperative: Enabling Integration Across the Wealth Ecosystem
The Partnership Imperative: Enabling Integration Across the Wealth Ecosystem Embedding private assets across the entire portfolio management lifecycle requires a concerted effort. No single entity can achieve this integration alone; it demands robust collaboration. Ecosystem Partners Vendors, Asset
Slide 27: Integration into Existing Frameworks is Key
Integration into Existing Frameworks is Key → Integration means private assets need to ‘talk’ to your public portfolio — through shared risk, liquidity, and ESG lenses. Current assets • Existing holdings Total Portfolio Approach • Liquidity of assets Client Criteria → Private & Public Indexes →Integ
Slide 28: Contact
Contact Americas Asia Pacific Europe, Middle East & Africa The process for submitting a formal index United States China South Africa complaint can be found on the index +1 888 588 4567 (toll free) +86 21 61326611 + 27 21 673 0103 page of MSCI’s website at: Canada Hong Kong Germany https://www.msci.
Slide 29: About Us
About Us About MSCI Inc. MSCI (NYSE: MSCI Inc.) strengthens global markets by connecting participants across the financial ecosystem with a common language. Our research-based data, analytics and indexes, supported by advanced technology, set standards for global investors and help our clients under
Slide 30: Notice and Disclaimer
Notice and Disclaimer The data, data feeds, databases, reports, text, graphs, charts, images, videos, recordings, models, metrics, analytics, indexes, ratings, scores, The Information does not constitute, and must not be relied upon as, investment advice, credit ratings, or proxy advisory or voting