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US-based Nuveen, the investment management arm of TIAA, has just released its “Fifth Annual EQuilibrium Global Institutional Investor Survey: Institutional Investors Broaden Their Reach in Private Market Allocations.” The report examines how evolving perspectives on market, geopolitical and climate-related issues are influencing asset allocation decisions.
A new report by Nuveen,
a US firm overseeing a total of $1.3 trillion in AuM, shows that
66 per cent of investors globally plan to increase their private
asset allocations over the next five years while over 90 per cent
now hold both private equity and private credit compared with 45
per cent in 2021.
Capturing the views of the large investors, with the
participation of 800 institutions representing $19 trillion in
assets under management, Nuveen’s EQuilibrium Global
Institutional Investor Survey examines how evolving perspectives
on market, geopolitical and climate-related issues are
influencing asset allocation decisions.
“As institutions sharpen their focus on specialized real asset
opportunities, the trend toward private market solutions
continues to accelerate, reinforcing the role of real estate and
infrastructure as core components of institutional
portfolios,” said Harriet Steel, global head of
institutional at Nuveen. “Long-term growth opportunities are back
in focus and investors are reassessing the attractive return
potential and effective inflation hedges of real estate and
infrastructure, amid lingering concerns over deficits, trade
policy and structural inflation risks.”
Private infrastructure and private real estate saw the biggest
year-over-year increases in the percentage of investors globally
planning to increase allocations from 35 per cent and 24 per cent
respectively, in 2024 to 50 per cent and 37 per cent,
respectively, in 2025. Further, investors are being selective in
targeting specific high-growth areas within both markets, such as
data centers and private infrastructure debt.
Data centers have emerged as a leading priority, with 65 per cent
of investors planning to increase allocations to real estate
focused on digital infrastructure, reflecting the rapid expansion
of cloud computing and AI-driven demand, the firm said.
Government initiatives aimed at modernization and sustainability
are further fueling investor interest in infrastructure. Over 30
per cent of investors who are planning to increase private fixed
income assets are looking at energy infrastructure credit, the
survey shows.
Insurers based in EMEA indicated their conviction in private real
estate, with 46 per cent of this cohort planning to increase
allocations over the next two years, compared with 27 per cent
last year.
Within Europe, the strongest interest is coming from German
investors where more than half plan to increase allocations to
private real estate compared with 24 per cent last year, the firm
said.
Private markets powering portfolio
construction
Nuveen highlighted how institutional investors are continuing to
deepen their commitment to private markets, with 66 per cent
planning to increase allocations to private assets over the next
five years. More than 90 per cent now hold both private equity
and private credit, a sharp rise from 45 per cent in 2021,
underscoring the expanding role of private markets in
institutional portfolios.
The report also shows that 71 per cent of UK investors are
planning to increase their allocations to private markets, with
52 per cent increasing allocations to private credit.
“Private market flows remain resilient, with funding sourced from
public asset outflows, cash reserves, and new capital,” said
Steel. “Even those adjusting allocations within private markets
are largely reallocating rather than exiting.”
Private infrastructure, credit and equity continue to attract
attention, with nearly half of investors planning to expand
allocations to these areas. Within these categories, investors
indicated that private equity is where they plan to make the
greatest increase, the survey shows.
A trend toward higher-yield, higher-risk fixed income is also
emerging, with private fixed income now a leading focus. Nearly
half of respondents are exploring new niche areas within private
credit, such as energy infrastructure credit and fund finance.
As allocations to alternatives grow, nearly 40 per cent of
institutions are expanding their roster of asset managers to
navigate increasing complexity and specialization.
Investors with higher allocations to alternatives are more likely
to have dedicated investment teams, signaling a shift toward
increasingly sophisticated decision-making in private market
investments.
Insurers lean into private markets and impact
investing
Insurers are shifting toward strategic growth and specialization.
While geopolitical risks and market volatility remain on their
radar, insurers are expressing less concern over economic growth
and recession risks in 2025 than they did in 2024, the firm said.
This confidence is reflected in their foresight and early moves
in reformulating their capital market assumptions, with only 27
per cent adjusting their methodologies due to shifting
fundamentals this year – down from more than half in each of the
past two years.
As insurers look beyond short-term risks, private market
allocations continue to expand, with 69 per cent planning
increases over the next five years. Private credit remains a
particular area, with insurers boosting allocations to private
real estate debt (45 per cent) but also broadening their exposure
to niche opportunities, including energy infrastructure credit
(46 per cent), private asset-backed securities (34 per cent) and
fund finance (26 per cent). These shifts underscore a growing
appetite for complexity and yield-enhancing strategies within
insurance portfolios.
Insurers are also evolving their approach to responsible
investing, placing greater emphasis on positive impact
metrics and benchmarking to the United Nations’ Sustainable
Development Goals. Currently, 93 per cent either incorporate or
plan to incorporate environmental and social impact factors into
their investment strategies – signaling a continuing evolution
toward measurable, outcome-driven approaches. Over half report
managing a separate sleeve in their portfolio for impact
investments, compared with 26 per cent in the firm’s 2023 survey.
Investors are also adopting a more balanced and pragmatic view of
the energy transition, with 73 per cent of respondents agreeing
that near-term energy needs cannot be met without incorporating
both traditional and renewable energy sources.
“We are seeing a shift toward strategies that combine the
practicalities of current energy needs with the ambitions of a
sustainable future,” said Steel.
While fewer investors now view the low-carbon transition as
inevitable – 61 per cent compared with 79 per cent in 2022
– the commitment to clean energy remains strong. Most
institutions are prioritizing clean energy and carbon reduction
either as part of net zero goals or to capture compelling
risk-return opportunities.
Overall, 44 per cent of institutions have net-zero commitments
while another 25 per cent plan to in the coming 12 months.
While 45 per cent of institutions identify nature loss as a top
five economic risk, only three in 10 are increasing their
allocation to nature-related themes within their portfolios, the
survey reveals. This likely reflects the fact that nature-related
investing is still a developing area, with many allocators in the
process of educating themselves and building their understanding.
Among those prioritizing nature-based investments, 79 per cent
are seeking strategies that go beyond sustainability to
proactively mitigate environmental degradation. Sectors such as
water and waste management, pollution reduction and recycling are
emerging as key opportunities, offering a dual benefit of
environmental risk mitigation and attractive return potential.
Nuveen has operations in 32 countries.
