Goldman Sachs survey of 255 LPs worldwide

Largest share of respondents plan to increase private market allocations

Geopolitical tensions cited as top investment risk

Appetite remains strong despite delayed distributions

Goldman Sachs [Yonhap]
Goldman Sachs [Yonhap]

Institutional investors remain committed to private markets globally, even as geopolitical risks and artificial intelligence emerge as forces reshaping the landscape, according to new analysis.

Goldman Sachs Alternatives released Thursday the results of its "2026 Global Alternatives Survey: LP Perspectives — Recalibrating, Not Retreating," based on responses from 255 limited partners worldwide.

Goldman Sachs is one of the world's largest alternative asset managers, with more than 30 years of experience and over $706 billion in assets under management. Its alternative investment activities span private equity, growth equity, venture capital, private credit, real estate, infrastructure, sustainability and hedge funds.

The survey was conducted over three months from June through September. Respondents included public and private pension funds, insurance companies, university endowments and foundations, investment consultants, sovereign wealth funds and public institutions, family offices, asset managers, and corporate pension plans from around the world. Twenty percent of all respondents manage more than $100 billion in assets. By region, respondents were split among the Americas (43 percent), Europe, the Middle East and Africa (40 percent) and Asia-Pacific (17 percent).

Among the findings, 37 percent of respondents said they plan to increase their private market allocations going forward, while 47 percent said they expect to deploy capital at roughly the same level as last year.

Private markets refer to investment activity conducted outside public exchanges, raising capital through private means to invest in corporate equity, loans and real assets. Major participants include institutional investors and high-net-worth individuals. Key strategies include private equity, which invests in unlisted company shares; private credit, which lends directly to companies; and real estate and infrastructure investment.

"Even amid dynamic and shifting risks, LPs are recalibrating their strategies — where to deploy capital, with whom, and on what terms," said Marc Nachmann, global head of Goldman Sachs Asset and Wealth Management.

LPs identified geopolitical tensions as the single greatest investment risk, with 36 percent selecting it as their top concern. In a multiple-choice question asking respondents to name their top five risks, 82 percent included geopolitical tensions — the highest share of any risk. Inflation (67 percent) and a US economic slowdown or recession (63 percent) followed.

AI has also begun to emerge as a new risk factor. Twenty-eight percent of LPs named "job displacement from technological advancement" as one of their top five risks, and most respondents who selected "other" cited AI-related concerns. At the same time, AI is seen as an opportunity: 34 percent of LPs identified it as the most powerful force set to transform the alternatives industry over the next five years, far ahead of industry consolidation (13 percent) and economic instability (13 percent).

"Geopolitical tensions and a higher-for-longer rate environment have slowed traditional exit activity," said Jeff Fine, global co-head of Alternative Capital Formation at Goldman Sachs Alternatives. "But the race to build AI infrastructure is creating what may be the most significant investment opportunity of the 2020s."

While LPs' appetite for private markets remains strong, delayed distributions from general partners are constraining deployment. The share of LPs reporting that their private credit allocations fall short of target rose from 43 percent last year to 48 percent this year, while the share reporting allocations above target fell from 12 percent to 4 percent over the same period. Thirty-five percent of LPs cited insufficient distributions as the single biggest factor affecting their deployment plans.

As holding periods lengthen, LP scrutiny of managers is intensifying. Most respondents said a significant portion of their commitments over the past 12 months went to re-ups with existing general partners. When asked what factors matter most in selecting additional GPs, respondents ranked track record (78 percent), access to new strategies or asset classes (50 percent), specialist expertise (39 percent) and sector and geographic diversification (35 percent).

"New managers must prove their right to capital," said Mike Brandmeyer, global head and chief investment officer of Goldman Sachs Alternatives' External Investing Group. "Track record matters, but investors are rigorously evaluating managers on their disciplined underwriting, their clear and differentiated edge over competitors, and their ability to adapt to the structural changes AI is bringing."


park.jiyeong@heraldcorp.com