- Private markets have grown to roughly $13 trillion and are projected to exceed $20 trillion by 2030, driven by rising allocations from pensions, insurers, wealth and sovereign investors.
- Family offices are not abandoning private markets; they are rotating within them, trimming traditional private equity and real estate while adding infrastructure and other selective alternatives.
- With the Federal Reserve raising rates in September 2026 and commercial property still 14% below its 2022 peak, valuations are being reset through a more disciplined lens.
- Demographics, digital infrastructure and supply chain resilience remain durable drivers of long-term opportunity.
- History suggests that capital deployed with discipline during periods of uncertainty is often among the best performing.
A few months ago, one of the biggest debates in the financial world wasn’t about which stock would outperform or whether the Federal Reserve would cut rates. It was about a simple question: Why are so many large institutional investors and family offices moving more capital into private markets while public markets continue to make headlines?
At the same time, another conversation has been dominating boardrooms and investor meetings. Commercial real estate valuations have been under pressure, borrowing costs remain significantly higher than they were just a few years ago, and geopolitical tensions—from global supply chain disruptions to ongoing conflicts affecting energy and commodity markets—continue to create uncertainty. Add to that the rapid rise of artificial intelligence, which is reshaping entire industries almost overnight, and it’s easy to understand why many investors are asking whether the traditional playbook still applies.
The reality is that the fundamentals of many businesses have not changed—but the economic environment around them certainly has.
Source: BlackRock Private Markets Outlook; Federal Reserve (September 16, 2026); Green Street Commercial Property Price Index (June 2026).
Where Institutional Capital Is Moving
The scale of the shift is significant. BlackRock estimates that private markets account for roughly $13 trillion in assets today and expects them to grow to more than $20 trillion by the end of the decade, driven by rising allocations from pensions, insurance companies, wealth managers and sovereign investors.1
Family offices, however, are telling a more nuanced story. In UBS’s Global Family Office Report 2026, which surveyed 307 family offices with an average net worth of $2.7 billion, geopolitical conflict ranked as the top risk over both the short and long term, and a record 60% of respondents said they plan to change their strategic asset allocation within the next 12 months.2 Alternatives remain steady at about 42% of the average portfolio, but planned allocations show private equity falling from 21% to 17% and real estate from 11% to 8%, while infrastructure and hedge funds gain share.3 The message is not a retreat from private markets. It is a move toward greater selectivity, diversification and resilience.
Why Uncertainty Creates Opportunity
Periods like these serve as an important reminder that markets are cyclical. Inflation, interest rate fluctuations, geopolitical uncertainty, and technological disruption all influence how capital flows and where opportunities emerge. While headlines often focus on volatility and risk, experienced private investors understand that uncertainty is not always something to avoid. In many cases, it is precisely during these moments that the most compelling opportunities are created.
How Higher Rates Are Resetting Valuations
Today’s market environment is a perfect example. On September 16, 2026, the Federal Reserve raised its benchmark rate by a quarter point to a range of 3.75% to 4.00%—its first increase since 2023—and signaled that one more hike is possible before year-end.4 Higher interest rates have fundamentally changed acquisition dynamics, encouraged more disciplined valuations, and increased the importance of creative capital structures.
Commercial real estate shows the reset clearly. Green Street’s Commercial Property Price Index rose 5.2% over the twelve months to July 2026, yet values across the market remain about 14% below their 2022 peak, with office still down roughly a third.5 Businesses and assets that may have been overpriced during years of abundant liquidity are now being reassessed through a more pragmatic lens. For investors with patience and access to flexible capital, this shift can create attractive entry points.
| Property type | Pricing vs. 2022 peak |
|---|---|
| Office | −34% |
| Apartments | −19% |
| Net lease | −18% |
| Industrial | −11% |
| Healthcare | −11% |
| Lodging | −9% |
| All property | −14% |
Source: Green Street Commercial Property Price Index, June 2026.
The Long-Term Trends Shaping the Landscape
At the same time, several long-term trends continue to shape the investment landscape. Population growth and migration patterns are driving demand for housing and infrastructure in key markets: between 2020 and 2025, the U.S. South grew by 6.0%, nearly double the national rate of 3.1%, and it was the only region to add population in every age group.6
The digital economy is increasing the need for logistics, data centers, and specialized industrial assets. Capital expenditure on AI data centers alone is expected to exceed $1.5 trillion by 2030, with power generation and transmission emerging as a critical part of the buildout.1 Companies across industries are also reevaluating supply chains and operational resilience, creating opportunities for strategic investment and business transformation. Capital is following these themes: even as overall private market fundraising slowed in early 2026, real assets fundraising rose 25% to $172 billion, supported by digitalization, the energy transition and supply chain shifts.7
The Questions Private Investors Are Asking Now
For private investors, this means the conversation is changing. The focus is moving away from simply asking, “What can grow the fastest?” and toward more strategic questions:
- Is this business or asset positioned to perform across different market cycles?
- Does the investment create long-term value, or is it dependent on favorable short-term conditions?
- Can operational improvements or strategic guidance unlock additional value?
- Is the opportunity supported by durable economic and demographic trends?
What Past Market Cycles Teach Us
History offers an interesting perspective. Some of the strongest businesses and most successful investments have been built during periods of uncertainty. After the 2008 financial crisis, investors who focused on fundamentals rather than fear were able to capitalize on opportunities that defined the next decade. According to PitchBook, 2009 was the best vintage year to have invested in private equity funds over the following decade, with top-quartile funds earning an average IRR of 19.6% and the median fund returning 12.2%.8 Similarly, periods of market dislocation often reward those who remain disciplined while others become reactive.
“In private investing, success is often determined not by following the noise—but by recognizing the opportunities that uncertainty creates.”
JLS Capital InsightsWhy Private Markets Continue to Attract Capital
This is one of the reasons private markets continue to attract sophisticated investors. Unlike public markets, where sentiment can shift dramatically from one news cycle to the next, private investments allow for a more deliberate approach—one centered on fundamentals, strategic execution, and the ability to create value over time.
The JLS Perspective
At JLS Capital Group, we believe that every market cycle presents a different set of challenges—and a different set of opportunities. Rather than trying to predict every headline or react to short-term volatility, our approach is grounded in disciplined analysis, long-term thinking, and identifying investments where active stewardship and strategic execution can create lasting value.
The economic landscape will continue to evolve, and the topics dominating today’s discussions will eventually give way to new ones. But one principle remains remarkably consistent: while markets change, the value of patience, preparation, and thoughtful decision-making never goes out of style.
Because in private investing, success is often determined not by following the noise—but by recognizing the opportunities that uncertainty creates.
Sources
1. BlackRock, 2025 Private Markets Outlook: A New Era of Growth, as reported by ABF Journal. abfjournal.com
2. UBS, Global Family Office Report 2026, press release, May 28, 2026, via Jersey Finance. jerseyfinance.com
3. Caproasia, “UBS Global Family Office Report 2026,” June 11, 2026. caproasia.com
4. NPR, “The Fed raises interest rates for the first time in over three years,” September 16, 2026; Yahoo Finance, Fed meeting live coverage, September 16, 2026. npr.org
5. Green Street Commercial Property Price Index, June and July 2026, as reported by CRE Daily and Connect CRE. credaily.com
6. U.S. Census Bureau, Vintage 2025 Population Estimates, June 25, 2026. census.gov
7. PitchBook, Q1 2026 Global Private Market Fundraising Report, as reported by Crowdfund Insider, May 2026. crowdfundinsider.com
8. PitchBook Global Private Equity and Venture Capital Benchmarking Report (10 years through June 30, 2016), as reported by Institutional Investor. institutionalinvestor.com
