To gain deeper insights, we spoke with Gary Hui, Senior Vice President & Head of the Hong Kong Office at Wilshire, who shares his perspectives on key trends, opportunities, and challenges that institutional investors and family offices should consider.

The macroeconomic landscape is shifting—how do you see private markets evolving in 2025? Any asset classes or trends you think will stand out?

Every year, we take a top-down approach to identify the key global mega-trends that will shape private markets. For 2025, the four global megatrends we identified are:

• Interest Rates: Central banks are normalizing rates amid moderating inflation, but emerging inflationary pressures and geopolitical factors may lead to structurally higher rates, impacting consumers, businesses, and real assets.

• Geopolitics: Trade tensions, especially between the U.S. and China, alongside broader geopolitical shifts like deglobalization and changes in European politics, will impact the global economic landscape.

• Artificial Intelligence: AI continues to transform global markets by enhancing infrastructure and technology, expanding beyond tech sectors. The 2025 investment focus will likely include AI-driven solutions and digital infrastructure.

• Energy Transition & Sustainability: This year will see continued efforts in energy transition and sustainability to address climate change, with investments in renewable energy and decarbonization technologies being crucial despite varying regional priorities and approaches.

By distilling these megatrends into a regional context, we have identified key investment opportunities in North America, Europe, and Asia-Pacific:

North America

• Buyout: Poised to benefit from low interest rates, particularly small-cap and sector-focused managers with strong operational value-add capabilities.

• Infrastructure: Strong opportunities in AI and energy transition-related infrastructure, bolstered by government support and geopolitical tailwinds.

• Opportunistic Credit: Well-positioned in the evolving interest rate environment, with potential for superior returns with below-market risk.

Europe

• Buyout: With deal activity increasing in 2024 due to decreasing interest rates, this trend is expected to continue into 2025. Special situation buyouts and forced-seller opportunities may arise due to increased broken auctions.

• Venture: A valuation gap between U.S. and European VCs, coupled with lower competition levels, presents attractive opportunities.

• Opportunistic Credit: A significant opportunity due to supply-demand imbalances.

Asia-Pacific

• Venture: Strong tech adaptation, a young population, and supportive government policies in major economies drive opportunities. The Indian VC market is rapidly developing, while China remains the largest VC market in the region.

• Buyout: Mid-market buyouts in developed Asia, particularly Japan and Korea, offer lower competition, attractive valuations, and significant value creation potential.

What key factors should institutional investors and family offices consider when allocating to private markets today?

Two critical factors stand out when investing in private markets, especially in today’s volatile market conditions:

• Diversification: Deglobalization trends may lead to lower correlation among key geographies and asset classes. A diversified portfolio across regions, strategies, and sectors is essential.

• Manager Selection: Private markets exhibit significantly higher performance dispersion than public markets. Selecting the right managers is crucial to achieving superior investment outcomes.

With ongoing economic and geopolitical uncertainties, how should investors adjust their strategies to manage risk while seizing new opportunities?

• Economic and geopolitical uncertainties create both risks and opportunities. For example, special situation buyouts in Europe and supply chain reorganizations benefiting India and Southeast Asia.

• The deglobalization trend increases the importance of diversification, as correlations between geographies and strategies could be lower in the future.

What unique opportunities are emerging in private markets across the Asia-Pacific region, and what challenges should investors keep in mind?

Wilshire is particularly excited about venture capital opportunities in Asia-Pacific. The region exhibits a high adaptation to technology, strong entrepreneurship, and government support. However, challenges include:

• Venture capital is highly localized, requiring deep market understanding and strong networks.

• Performance dispersion in private markets is significantly higher than in public markets, making manager selection crucial.

• Access to top-tier VC funds remains a key challenge for many investors.

How does Wilshire differentiate itself in this space, and what value does it bring to investors navigating these complexities?

Wilshire is a trusted global advisor with over 50 years of experience, managing $1.5 trillion in assets under advisement (AUA) and $124 billion in assets under management (AUM). The firm’s expertise includes:

• Global Investment Experience with Local Expertise: A team of 55 professionals across five offices provides deep coverage of private markets.

• Rigorous Manager Selection: A systematic framework for due diligence ensures access to top-tier opportunities.

• Differentiated Access to Asia-Pacific VC: Strong relationships with top-tier funds and an extensive network tracking emerging VCs.

As private markets continue to evolve, investors must remain adaptable, leveraging insights, diversification, and strong partnerships to navigate the complexities ahead. Wilshire’s expertise and structured approach provide a valuable roadmap for institutional investors and family offices seeking opportunities in 2025 and beyond.