December 2025

In markets driven by geopolitics, strained economic momentum and fading investor complacency (see market review), hedge funds held up well, with the HFRI Fund Weighted Composite Index rising 0.7%. Equity strategies were broadly positive, as the HFRI Equity Hedge Index gained 1.1%. Healthcare led the way, up 7.6%, followed by Equity Market Neutral at 1.7%.

The world isn’t just changing - it’s shifting on multiple axes at once. Old geopolitical alliances are crumbling, domestic politics is increasingly polarised, technology is disrupting entire industries, and the monetary system is quietly moving toward something more fragmented and still undefined.

When the founders of Ares chose to name their firm after the Greek god of war, they probably weren’t imagining an audience of income-focused retail investors in, say, the American Midwest. Yet almost three decades later, Ares has become one of the defining forces in global private markets, particularly private credit, managing close to $600 billion.

Stuck in the middle may not be such a bad place to be. As we head into 2026, it is worth taking a moment to look at where GPs and investors may shift focus in the quest for value in some less-advertised places.

Early investors in private credit treated the asset class as a stable income engine: floating rates with consistent yields, low volatility, and safety in seniority of capital structures. According to Preqin’s asset allocation study, although most institutional investors were maintaining or increasing commitments, expectations have diminished.

Last year, celebrated vacuum inventor and one of the UK’s largest farmers, James Dyson, promoted Jane Simpson to CIO at Weybourne, his family office that runs an $18 billion portfolio spanning hedge funds, venture and real estate.

What happens to illiquid assets in a portfolio, stakes in private equity funds, venture capital investments, or direct real estate holdings, after the death of an (U)HNW individual? Unlike publicly traded stocks, these assets cannot be simply sold on an exchange to fund death duties or distributions.

As the family office space has grown in both size and sophistication in recent years, so has demand for independent investment support for families’ own investment activities. One of the major areas of growth has been the emergence of the ‘Outsourced Chief Investment Officer’ or ‘OCIO’.

Warburg Pincus secured $12 billion at first close of its latest global private equity fund. The haul puts the firm a long way toward a $17 billion target, underlining continued investor appetite for scaled, diversified platforms with track records. The fund will back buyout and growth investments across healthcare, technology, financial services and energy transition themes.

WindRose Health Investors closed Fund VII at $2.6 billion, its largest fund to date. This is a continuation of the firm’s strategy that invests in US healthcare services businesses, with a particular focus on outsourced provider services, speciality physician platforms, outpatient care and tech-enabled healthcare companies that improve efficiency and patient outcomes.

Reinforcing its position as one of India’s largest managers, ChrysCapital closed its tenth flagship fund, ChrysCapital Fund X, at $2.2 billion, the largest India-focused private equity raise to date. The firm, founded in 1999 by Ashish Dhawan, has long been one of the most influential investors in the country’s growth-equity ecosystem.

Bessemer Venture Partners closed BVP Forge II at $1.0 billion, completing the fundraise in only four months. Forge II continues BVP’s hybrid-model strategy of investing in profitable, self-sustaining technology and services companies that fall outside the traditional venture profile yet still benefit from hands-on support.

Rockland Capital closed its fifth flagship fund, Rockland Power Partners V, at $1.2 billion. The vehicle continues Rockland’s strategy of investing in North American power and energy transition assets, including conventional generation, renewables, storage and grid-supporting infrastructure.

KKR has started marketing KKR Asia Private Equity Fund V, targeting $15 billion, Reuters reports. The fund will invest across high-growth regional markets, including India, Southeast Asia, China, Japan and South Korea.

Arrow Global closed Lending Opportunities Fund I at €1.5 billion, marking a milestone for the firm’s fast-expanding real estate and private credit platform. The vehicle focuses on originating and acquiring real estate-backed credit across the UK and continental Europe.

US middle-market private equity firm Sterling Investment Partners closed Fund V at $1.6 billion, its largest fundraise to date. The strategy continues Sterling’s focus on business services, distribution and related sectors, targeting established companies where it believes it can drive operational improvements, scalability, and long-term growth.

Neuberger Berman closed NB Private Debt V at $7.3 billion, including leverage, surpassing the fund's target. The focus is senior-secured, first-lien and unitranche loans to US middle-market companies, predominantly private equity-backed.

Hillhouse Investment is looking to raise $7 billion for its latest fund, testing investor appetite for Asian private equity. This follows its $18 billion fundraise in 2021, which at the time was Asia’s largest. Founded in 2005 by Lei Zhang, Hillhouse has become a pan-Asian powerhouse with headquarters in Singapore and offices across East Asia.

Blue Pool Capital, backed by Alibaba Group co-founder Joe Tsai, is looking to raise $750 million for its first fund, Riverside, to invest in global opportunities across consumer, finance and technology, including China.

J.P. Morgan’s Private Equity Group (PEG) closed Co-Investment Fund II at $1.0 billion, signalling sustained LP appetite for co-investment strategies. The fund invests alongside PEG’s network of global GP partners, which historically has been around 70% in North America, 20% in Europe, and the remainder in Asia and other markets.

Singapore-based Aquilius raised $1.1 billion for its second flagship regional real estate secondaries fund, surpassing its $700 million target. Founders Bastian Wolff and Christian Keiber note that Asia has nearly a third of global private-market assets yet receives less than 10% of dedicated secondaries capital.

News that China Investment Corporation is selling around $1 billion of US private equity fund stakes marks one of the largest sovereign-driven secondary transactions this year. The portfolio reportedly includes interests in major global buyout firms, signalling a deliberate rebalancing rather than distressed selling.

Bill Ackman plans to list Pershing Square Capital Management, L.P., with a target of Q1 2026. The move follows years of speculation that Ackman would eventually transition his firm from a traditional hedge-fund model toward a listed, permanent-capital structure.

PwC’s 2025 Global Asset & Wealth Management Report highlights a sharp rise in private-markets assets, signalling how alternatives are reshaping the industry’s growth profile. The report projects global AUM rising from $139 trillion in 2024 to $200 trillion by 2030, with alternative strategies capturing a larger share of new capital.

Amundi acquired a 9.9% stake in ICG as part of an accelerated push into private markets. The £550 million deal positions Amundi as ICG’s largest shareholder and establishes a 10-year strategic partnership focused on developing private-markets products for wealth clients.

Apollo, Blackstone and KKR signed-up for the UK’s first system-wide stress tests for private markets, marking a turning point in how seriously regulators now view rising systemic risk in private credit. Concerns have intensified following recent failures among heavily leveraged US borrowers that collapsed under refinancing pressure.

Hg set in motion its formal succession plan as it enters its next phase of growth, elevating senior leaders Steven Batchelor and Jean-Baptiste Brian to a newly established dual-CEO role. The leadership refresh marks a strategic evolution for the European software-focused private-equity house.

Man Group pressed ahead with a restructuring programme that sees various London-based roles move to Bulgaria, where the firm already has an operational footprint. The move reflects the dual pressures of cost efficiency and competition for technical talent, particularly after a difficult period for the flagship AHL.

Michael Burry closed Scion Asset Management, drawing a line under a period during when he bet against major AI-driven stocks, including Nvidia and Palantir. The move follows months of noisy scepticism from Burry over what he says are inflated valuations in the AI complex and broader “narrative-driven” excess in equity markets.

The Benetton family’s Edizione S.p.A. unveiled 21 Next, merging 21 Invest and Milan-based Tages, marking a major strategic expansion into alternative assets. Launching with €3 billion in capital and a bold plan to triple its assets, the Financial Times writes, the firm is looking to become a multi-asset powerhouse spanning the full spectrum of private-market strategies.

The FCA has published consultation CP25/32, Improving the UK transaction reporting regime (“UK TR”). The transaction reporting regime was first introduced in the mid-2000s as a market abuse surveillance tool for EU national state regulators.

The Sustainable Finance Disclosure Regulation (“SFDR”), the EU’s framework for financial products with environmental, social or governance (“ESG”) objectives, was adopted in November 2019 and has been in force since March 2021.

The US Securities and Exchange Commission’s (“SEC’s”) Division of Examinations (“the Division”) announced its 2026 Examination Priorities. The Division releases its annual examination priorities to offer insight into areas it believes pose potential risks to investors in an evolving financial and regulatory landscape.