Private markets reshape wealth management as alternatives drive portfolio diversification and revenue growth, says GlobalData

Phoebe Hodgson, Banking and Payments Analyst at GlobalData, says: "This shift reflects a changing market environment where traditional public equities and fixed income are no longer sufficient to meet client expectations for performance and resilience. As a result, portfolios are becoming more institutional in nature, with a greater focus on long-term and less correlated sources of return. This benefits clients to be sure, but also provides revenue for wealth managers less tied to the gyrations of the financial markets."

GlobalData's report, "Global Wealth Management Competitive Dynamics 2026," details how wealth managers have been increasingly differentiating themselves by offering unique opportunities, including direct co-investments and niche thematic funds. This means that private markets have played a central role in driving revenue, with clients seeking alternatives, such as direct co-investments and ESG-focused funds.

For example, the prominence of private equity markets, particularly in cities such as London, Paris, and Frankfurt, has bolstered Europe's reputation as a leading wealth management hub and boosted European wealth managers' revenues. In Switzerland, global private banks, including UBS, emphasized alternatives and bespoke lending to UHNW clients. Lombard lending and private market feeder funds increased wallet share while reinforcing recurring advisory fees.

Additionally, in Singapore, banks such as DBS embedded alternatives and cross-border wealth solutions into advisory propositions for regional family offices; capitalizing on rising Asian wealth and demand for global diversification.

Hodgson explains: "Across both these markets, adding lending, structured products, and private assets reduced reliance on traditional equity and bond fees. The result was a richer revenue mix, stronger client stickiness, and improved resilience against market volatility."

For clients, the rise of accessibility to alternatives is improving diversification and enhancing portfolio construction. Private markets can offer access to growth opportunities that are not available in public markets, as well as potential protection against volatility and inflation, such as that being caused by the ongoing conflict between the US and Iran in the Middle East.

At the same time, the development of more flexible investment structures is making these assets increasingly accessible, allowing a broader range of investors to participate.

Hodgson concludes: "Overall, the rise of alternatives marks a structural transformation in wealth management. As client demand continues to grow, private markets are set to play an increasingly important role in both portfolio construction and long-term growth strategies of wealth managers."