Private Assets' Accelerating Dominance: Strategic Reallocation in Illiquid Markets

The global asset landscape is undergoing a seismic shift as private assets-encompassing private equity, real estate, and credit-gain prominence in institutional portfolios. This trend, underscored by PwC's 2030 forecast, reflects a broader reallocation toward illiquid investments driven by the pursuit of non-correlated returns and long-term growth. Yet, as institutional investors like Prosus navigate this opaque terrain, the interplay of technological innovation, geopolitical risks, and regulatory shifts is reshaping the calculus of opportunity and caution.

PwC's 2030 Forecast: AI as a Catalyst for Private Asset Growth

PwC's strategic pivot toward artificial intelligence (AI) and data analytics is central to its vision for the future of asset management. The firm has committed significant resources to strengthening its AI capabilities, including a multi-million-pound investment in its partnership with Palantir Technologies. This collaboration aims to operationalize AI-driven insights for clients, enabling more precise valuation models and risk assessments in private markets. Such advancements are critical as global economic uncertainties-exemplified by U.S. tariffs and trade tensions-heighten demand for consulting services.

While PwC's 2030 forecast does not explicitly quantify private asset allocation percentages, the broader AI consulting market provides context. A 2025 report by GlobeNewswire projects that the AI consulting sector will grow at a 31.6% compound annual growth rate (CAGR), reaching $72.8 billion by 2030. This surge is fueled by enterprises seeking to integrate generative AI and cloud platforms into their operations, a trend PwC is positioning itself to lead. For private assets, AI's role in optimizing due diligence, portfolio management, and exit strategies could mitigate some of the traditional risks associated with illiquidity.

Prosus' Performance: A Case Study in Illiquid Market Challenges

Prosus, the Dutch multinational holding company, offers a contrasting lens. Its recent financial results highlight the dual-edged nature of private asset investments. For the first half of fiscal 2026, Prosus reported a projected 28.1–37.0% increase in earnings per share, driven largely by Tencent's performance. However, the company's exposure to illiquid markets-such as its equity-accounted investments in e-commerce ventures-reveals the volatility inherent in such strategies.

The private markets sector, while promising, is plagued by opacity. As noted in a Wall Street Journal analysis, private equity has underperformed public markets in 2023 and 2024, prompting investors to scrutinize returns. Prosus' experience underscores this challenge: while its ecosystem spans 2 billion consumers, the lack of transparency in private fund compositions complicates performance benchmarking. This opacity is exacerbated by the reluctance of fund managers to disclose data, a hurdle that PwC's AI-driven analytics could help overcome.

Navigating Risk: The Role of Data and Geopolitical Agility

The risks of private asset allocation are multifaceted. For PwC, the integration of AI is not merely a technological upgrade but a response to talent gaps and ROI uncertainties. The firm's chairman, Mohamed Kande, has acknowledged that AI will displace entry-level roles while creating demand for specialized engineers-a shift that mirrors the evolving skill sets required to manage private portfolios.

Geopolitical factors further complicate the landscape. PwC's suspension in China over its role in the Evergrande scandal illustrates how regulatory scrutiny can disrupt even the most sophisticated strategies. In contrast, Prosus' reliance on Tencent-a company navigating its own regulatory challenges in China-highlights the need for geopolitical agility. Investors must balance long-term growth potential with the risks of overconcentration in markets prone to sudden policy shifts.

Strategic Reallocation: Balancing Innovation and Prudence

For institutional investors, the path forward lies in leveraging AI and data analytics to enhance transparency and risk assessment. PwC's partnership with Palantir exemplifies how technology can demystify illiquid markets, providing granular insights into asset valuations and exit timelines. Similarly, private data firms are emerging to fill gaps left by declining public-sector climate data support, offering tools to evaluate ESG risks in private portfolios.

However, reallocation must be tempered with caution. The underperformance of private equity in recent years serves as a reminder that illiquidity is not a panacea for market volatility. Investors should prioritize diversification across asset classes and geographies while maintaining liquidity buffers to withstand sudden downturns.

Conclusion

The accelerating dominance of private assets is not a fleeting trend but a structural shift driven by technological innovation and the search for yield in a low-interest-rate world. PwC's 2030 forecast, anchored in AI and data solutions, offers a blueprint for navigating this new era. Yet, as Prosus' performance demonstrates, success in illiquid markets requires not only cutting-edge tools but also a nuanced understanding of geopolitical and regulatory dynamics. For institutional investors, the challenge-and opportunity-lies in striking the right balance between innovation and prudence.