WHITE PAPER

Capturing Wealth
Management’s $3 Trillion
Private Markets Opportunity

March 2025
By Akin Soysal, Michael Kahlich, Omar Rahman, Mathias Leijon, Oscar von Reis, Octavian Popescu, Steffen Pihlmann,
Johanna Jungner, and Caspar Macqueen
 Introduction

Private markets are attracting rising numbers of new investors. To make the most of the opportunity,
wealth managers and GPs need a strategic approach to engagement and a new take on technology.

Private markets were traditionally seen as exclusive niche in the investment landscape. But
that’s changing fast. The combined impacts of strong returns and easier access are increas-
ingly putting assets such private debt and equity, private real estate, venture capital, and
infra-structure in the limelight. Assets under management (AuM) have been growing at an
impressive 12% a year, but with new waves of investors getting involved, wealth managers
must adapt fast to meet the market’s changing needs.

As private markets move from the margins to the mainstream, there is a potential for wealth
managers to expand their product offerings and embrace new approaches to distribution,
earning higher recurring fees in the process. Similarly, in the private equity and venture
capital space, GPs can create dedicated funds or share classes to engage more closely with
high-net-worth individuals (HNWI). But growth will also create pressure on operating models.
At the current rate of market expansion, it will not be long before the standard approach to
serving private markets, based on personal distribution relationships and manual workflows,
is no longer fit for purpose.

To manage higher trading volumes and rising numbers of client interactions, wealth manag-
ers and GPs need new tools and capabilities. In sales, private markets will become an inte-
gral part of investment advisory and portfolio construction, while the back office will require
higher levels of automation and simpler, more efficient processes. Third party technology
platforms are likely to play a growing role, helping accelerate product launches, boost trans-
parency, and streamline operations. Implementing these necessary changes is unlikely to be
simple, but wealth managers that execute effectively have the chance to grab market share
and turn a previously niche proposition into a scalable business.

1 CAPTURING WEALTH MANAGEMENT’S $3 TRILLION PRIVATE MARKET OPPORTUNITY

The challenge
The Private Market Operating Model Will Not Cope with Growing Demand

As private markets have drawn in rising numbers of investors, the weaknesses embedded in
legacy infrastructure have been amplified, and wealth managers and GPs have seen they do not
have the capabilities they need to scale effectively. Some of the most common blockers include:

• Fund selection and relationship management: Significant time and resources required
to identify and select suitable GPs and to manage a growing number of GP relationships to
serve different client needs.

• Onboarding: Firms often run heterogeneous, paper-based onboarding processes for dif-
ferent market wrappers (e.g., feeder funds), each requiring standalone KYC/AML workflows
and multiple closings across funds.

• Cashflow management: Workflows such as capital calls, distributions, and redemptions

remain highly manual. For instance, each capital call to a feeder fund must be manually
assigned to individual investors and then followed up on a case-by-case basis.

• Reporting: Complex fund setups combined with low-frequency NAV updates are sub-
optimal for both wealth managers and their clients, with reporting relying on estimated
valuations rather than mark-to-market data.

• Technology integration: Wealth management systems are often designed around pub-
licly traded securities. As a result, they are tough to integrate with those of players in the
less liquid private markets ecosystem (See Exhibit 1).

• Post sales support: Amid infrequent updates and sometimes limited relationship manager
know-how, end investors can become impatient, driving concern over portfolio performance.

• Compliance: Diverse international and local regulations impose a heavy burden on GP

and WM legal and compliance teams, which must navigate a range of marketing restric-
tions, suitability checks, and KYC/AML requirements.

Given these challenges, it is common for wealth managers to add several FTEs for every
additional closed-ended fund they offer to HNWI clients. The inevitable result is higher costs.
Moreover, fund structures such as evergreens and semi-liquids often require additional FTE
support, reflecting their more frequent redemptions. Without additional investment, events
such as processing a capital call can be significantly delayed, potentially exposing clients to
penalty payments or exclusions.

GPs looking to broaden access to smaller investors face similar challenges. They often need
to navigate an extensive selection process for distribution partners, manage a large number
of relationships, and coordinate high numbers of onboarding processes (by institutional stan-
dards. Add processing of capital calls, distributions, and reporting obligations and the profit-
able scaling of distribution can feel like it’s well beyond reach.

BOSTON CONSULTING GROUP + ROYC 2

Exhibit 1 - Private markets ecosystem involving a large number of
participants interacting with limited scalability

General Sponsor
Partner (GP)

Investor Wealth Feeder Master Fund Portfolio

Manager Fund (LP) investments

Depositary Fund admin/ Legal/Tax Auditors

transfer agent

The opportunity
Individual Allocations to Private Markets Are Set to Increase

Global private market AuM exceeded $13 trillion in 2024 across private equity, venture capital,
private credit, private real estate, and infrastructure—a little more than a tenth of the public market
capitalization of about $100 trillion but still a substantial piece of business. (See Exhibit 2).

While higher interest rates have put the brakes on fundraising and private market deal-mak-
ing over the past two years, the longer-term trend is for further growth. We believe 12% annu-
al AuM expansion would be a reasonable expectation up to 2030, in part driven by 8-9%
annual growth in the wealth of individuals controlling more than $5 million.1 Other long-term
drivers include companies staying private for longer (for example, to take advantage of fewer
reporting requirements and longer-term capital commitments), the expansion of funding
opportunities in the private space, both in primary and secondary markets, and large pool of
potential investments. Globally, about 120,000 (or 85%) of large companies (>$100 million in
annual revenues are privately owned, suggesting there is significant untapped potential.

Individual investors, who have historically been underrepresented in terms of AuM, especial-
ly in Europe and Asia, are likely to be central to the market’s expansion, (See Exhibit 3).
Large wealth managers often recommend that HNWI clients make strategic allocations to
alternative investments of at least 10% of their assets and that UHNWI clients assign at
least 20%. In 2023, wealthy individuals in the U.S. allocated 15-20% of assets to private mar-
kets, while their counterparts in Europe and APAC allocated less than 5%.2 One reason for
the mismatch is history: private markets in the U.S. are more mature and established, with
large GPs generally more prominent than they are in Europe or Asia.

Looking ahead, regulation will play a growing role in driving demand. While the U.S. formal-
ized “accredited investor” participation in private equity in the 1980s, European regulation
was harmonized through AIFMD only in 2013. Today, recent European rules such as ELTIF
2.0 should help the region catch up. Given those dynamics, we expect individual allocations
to outgrow institutional allocations on a pro rata basis, expanding the share of wealthy indi-
viduals in the market from the current 20% to 22% by 2030. The implication for wealth man-
agers and GPs? A whopping $3 trillion growth opportunity.

1. Source: BCG Global Wealth Market Sizing.

2. Source: BCG Global Wealth Manager Performance Benchmarking.

3 CAPTURING WEALTH MANAGEMENT’S $3 TRILLION PRIVATE MARKET OPPORTUNITY

Exhibit 2 - Global private market AuM was about $13.3 trillion in 2024
across asset classes
Private capital AuM by asset class 2020–2030 (USD tn)

CAGR ’24–’30
26.3

Infrastructure1 +10%

+12% Private Real Est. +9%

Private debt +10%

Venture capital +13%

13.3

8.6

Private equity +13%

2020 2024F 2030F

Source: Preqin; BCG analysis.

Note: Hedge funds not included; Natural resources includes agriculture/farmland, energy, metals and mining, timberland, water.
Infrastructure incl. natural resources such as metals, agriculture, energy, timberland, and water.
1

Exhibit 3 - Individual allocations are set to grow by around USD 3tn

by 2030
Estimated institutional and individual private markets AuM 2020–2030 (USD tn)

+ USD 3tn 5.8 (22%) Individual Investors

+14% p.a.

2.6 (20%) 20.5 Institutional Investors

1.6 (18%)
10.7
7.1

2020 2024F 2030F

Source: BCG Global Asset Management Market Sizing, Preqin, BCG analysis.

BOSTON CONSULTING GROUP + ROYC 4

 Product Innovation Means Private Markets Are More Accessible to
HNWI Clients

Historically, minimum ticket sizes that were often in excess of $5 million and long lock-up
periods limited private market participation to the UHNWI segment. In recent years, rising
numbers of wealth managers have set up feeder funds offering more accessible minimum
ticket sizes of $100,000-$200,000. These structures enable WMs to pool capital commit-
ments from multiple HNWI clients to collectively meet minimum investment thresholds,
often acting as a single LP in the master fund.

In parallel, several product innovations, driven by GPs, technology players and regulators, are
lowering barriers to entry. These include:

• Evergreen PE funds: Evergreen private equity funds, with their perpetual tenors, continu-
ous subscriptions, and partial redemptions, provide some access to liquidity, although still
with many of the constraints of closed-ended funds. (See info box).

• Semi-liquid funds: Similar to evergreens, semi-liquids allow for scheduled redemptions

(e.g., quarterly), but to support those events they typically focus on asset classes with more
stable cash flows, such as private credit and real estate.

• Multi-asset-class funds: Multi-asset funds consolidate multiple asset class exposures into
a single investment solution, often offering individual investors exposure to private equity,
private debt, and real estate, with slightly higher levels of liquidity than closed ended funds.

• Secondary markets: Traditionally dominated by institutional investors, secondary mar-

kets have evolved with the introduction of technology-driven platforms that enable wider
access and more pricing efficiency (e.g., less steep NAV discounts).

• New legal frameworks: Frameworks such as ELTIF 2.0 and UCI Part II for Luxembourg-
based funds permit marketing of private markets funds to retail investors under specific
transparency and liquidity conditions.

As options for distributing private markets investments to end investors proliferate, some
large cap private market managers in particular have doubled down on the opportunity by
setting up distribution teams to turbocharge growth.

5 CAPTURING WEALTH MANAGEMENT’S $3 TRILLION PRIVATE MARKET OPPORTUNITY

Evergreen funds: no silver bullet for the private investor
Evergreen funds are open-ended investment vehicles with no fixed term, meaning they continuously accept subscriptions
and offer periodic redemptions. Unlike closed-ended funds, capital commitments are fully funded at subscription, elimi-
nating the need for subsequent capital calls. Some fund managers have launched retail-oriented evergreen funds with low
investment minimums. Still, the structure has two key drawbacks:

Partial liquidity at GP discretion, including:

• Lock-up periods ranging from 12 to 36 months from the date of the initial investment

• Limited redemption, typically 5% of the fund’s total NAV per quarter

• Two to six-month lead times for redemptions

Diluted returns: To enable early redemptions, evergreen funds need to keep higher liquidity reserves in the fund, impact-
ing returns and increasing costs:

• Standard cash holdings are 10-15% of assets, generating returns of close to zero, compared with cash holdings below 5%
for traditional close-ended funds

• Credit lines of up to 30% of NAV are common and generate fees without credit benefits (in normal market conditions)

Given these constraints, evergreen liquidity remains limited, suggesting the funds are primarily suited to larger investors
seeking continuous exposure to the same fund manager and hoping to benefit from long-term compounding without
added complexity.

Wealth Managers Can Benefit Across Revenue Streams

As private markets continue their recent progress, wealth managers have an opportunity to
scale their offerings across several revenue streams. Some of the most promising include:

• Advisory and feeder fund fees. Combined fees are often in the range of 1-1.5% of de-
ployed capital for pooling client commitments and continuously managing client positions.

• Subscription fees. Some WMs charge upfront fees of 1-2% to cover deal sourcing, se-
lection, and due diligence costs (this may alternatively be included in the advisory fee or
covered by separate distribution fees paid by GPs).

• Secondaries. If a client decides to prematurely sell a private markets position on a sec-

ondary marketplace, a brokerage fee of 3-5% of NAV may apply, and wealth managers may
add a 10-20% NAV discount, generating additional upside.

• Foreign exchange (FX) fees. Many funds are accounted for in USD, meaning conversion
from any other account currency will yield additional FX fees.

Given these realities, we estimate wealth managers could generate at least 20-40% higher
RoAs on private market assets than on actively managed in-house mutual funds, depending
on realized performance. (See Exhibit 4). Moreover, longer lock-in periods would mean a
lower cost-to-serve for more liquid investments, as client relationships become more sticky.

BOSTON CONSULTING GROUP + ROYC 6

Exhibit 4 - Wealth manager value creation is higher in private equity

Example: Two positions of € 2.5 million held for 10 years respectively; PE position exited via secondary markets

Private equity position fees (p.a.1) In-house mutual fund position (p.a.1)

Average performance 10% p.a.2 Average performance 6% p.a.3

Recurring fees Recurring fees

Advisory/custody fee 0.7% 27’900 Advisory/custody fee 0.7% 23’100

Feeder fund fee 0.5% 19’900 Fund management fee 0.8% 26’400

One-time fees One-time fees

FX fee 0.4% 3’400 FX fee 0.4% 2’700

Secondary market fee4 3.0% 15’900

Total fees 67’100 Total fees 52’200

20–40%

LTV of PE positions 20-40% PE position with excess Further LTV upside of PE position
higher vs. mutual fund position return of 2.5% p.a. given lower client attrition risk
driven by higher performance and net of all fees compared and cost to serve due to
different fee structure to mutual funds illiquid position

Source: BCG project experience.

Revenues averaged over 10 year lifetime, considering position growth with average performance.
1

Return on subscribed capital net of GP fees.

2

Return gross of management fee.

3

Secondary market fees assuming 10% markdown on position NAV.

4

Technology Platforms Can Simplify and

Streamline Interactions
In recent years, demand for private market third-party technology platforms has grown rapid-
ly, with investors able to choose from a range of options to suit their needs. Some platforms
are pure-play B2B, aiming mainly to connect wealth managers and their HNW clients with
top-tier asset managers. Others are B2C, providing individual investors with direct access to
private equity funds. Through our client engagements, we have seen three key ways in which
platforms can support effective scaling:

1. Facilitating interactions between distribution partners. For GPs, platforms enable

faster product launches, driven by the ability to deploy investment opportunities across
distribution partners and channels. Through client and advisor dashboards, the platforms
enhance the user experience, deepen engagement, and boost conversion. In addition, they
offer administrative support such as management of drafting, review, and negotiation of
distribution agreements. Finally, they reduce cost-to-serve, both through scalability and
their ability to handle inbound requests for information.

7 CAPTURING WEALTH MANAGEMENT’S $3 TRILLION PRIVATE MARKET OPPORTUNITY

 For wealth managers, platforms materially lower the cost of fund selection, help them
manage numerous GP relationships and facilitate compliant setting up of feeder fund
structures. They also offer a digital interface for advisors and clients to manage and moni-
tor investments, enhanced by tools for analysis, research, and RM education.

Given these upsides, platforms help wealth managers and GP reduce sales rep headcount
and significantly accelerate onboarding of new partners.

2. Digitizing and centralizing fund lifecycle management. Once a wealth manager and
GP have a distribution agreement in place, platforms streamline numerous operational
processes. For example, they support digital LP onboarding - building on existing client
data and backed by electronic signatures, digital identification, and automated account
creation. They enable digital subscriptions with standardized and pre-filled documenta-
tion, all transferred digitally across the ecosystem. Once clients are onboarded, they track
and monitor subscriptions, capital calls, and distributions, giving users better insight into
the liquidity/fundraising pipeline. Finally, they produce aggregated reporting for clients
and advisors, including tracking of fees and other expenses, while supporting oversight of
nominee structures, especially for regulated banks. These benefits reduce manual steps,
improve client experience, reduce back-office costs (for both GPs and WMs ), and boost
data quality and transparency.

3. Orchestrating the private market ecosystem: Beyond providing clients and advisors
with an integrated overview of investments, technology platforms reduce friction by sup-
porting collaboration with depositaries, fund administrators, transfer agents, and other
ecosystem players. (See Exhibit 5). They offer white-label interfaces that can be quickly
set up and branded for GP fund managers and WM clients and advisors, as well as APIs
and infrastructure for secure data exchange. As a result, platforms can help GPs and WMs
obtain more frequent and seamless outputs from service providers including depositaries,
fund administrators, transfer agents, and legal advisors.

Exhibit 5 - Technology platforms can serve stakeholders across the market

Individual Investor: Fund Manager:

• Onboarding/KYC • Fund structuring and administration
• Investment subscriptions • Fund life-cycle management
• Reporting and analytics • Distribution (partner and Fund
Individual Investor Fund
• News and educational content geography selection) Manager
Investor Portal Manager
Portal

Technology
Platform
Wealth Manager:
• Overview of client activities Agreements,
Regulated Fund Service Provider:
• Investment management KYC,
• Coordination and oversight of fund's account
(e.g., capital calls coordination) statements,
Wealth service providers
Admin • Client analytics etc. Regulated Fund
Manager • Information flow enablement
Portal • Integration with WM's systems Service Provider
(e.g., through APIs)
through APIs (e.g., digital banking)

BOSTON CONSULTING GROUP + ROYC 8

 Leading Wealth Managers Are Building
Their Capabilities
Technology platforms can be a transformative route to efficiencies and better client experi-
ences, but they cannot magically create private market “supermarkets” for wealth managers
and end clients. To truly capitalize on the opportunity, wealth managers need to deeply
embed private markets into their value chains. (See Exhibit 6). Here are three key areas
where leading firms are focusing:

1. Embed private markets into a holistic advisory process supported by hook offerings

Forward-looking firms attract client interest and engagement through so-called hook offerings.
For example, one market leader created a discretionary mandate with a significant private mar-
ket allocation, which it combined with $1 billion in seed funding from the bank’s founding
family. Over time, AuM grew twenty-fold as clients looked to invest alongside the family. To
further facilitate client engagement, the bank incorporated private markets into its advisory
process, covering topics from long-term wealth planning to tax optimization and legal report-
ing. It combined those efforts with continuous advisor education and revised sales incentives,
which had historically been biased toward mutual funds with higher upfront commissions.

2. Build a more differentiated offering across client segments

As adoption grows, clients are bringing a wider range of investment objectives and priorities
to the table. One leading U.S. wealth manager developed a comprehensive strategy for the
full range of wealth brackets, which it differentiated by the degree of complexity and tailoring
available. At one end of the spectrum, it offered affluent-oriented funds (e.g., U.S. registered
funds) for small ticket investments. For its core client demographic, it ensured broad access
to top quartile fund managers through a strong, AI-supported selection process followed by
systematic GP relationship management. For its most demanding clients, it enabled continu-
ous access to both single-deal co-investments and parallel co-investment funds. This en-
abled a higher degree of tailoring and superior net returns through the lower fees associated
with the approach.

A complementary strategy is to offer model portfolios with routine private market allocations
alongside access to a secondary markets platform, enabling clients to trade positions outside
of redemption windows. This approach enabled one wealth manager to achieve an average
private markets allocation of well over 10% across its client base.

Exhibit 6 - Wealth managers need to consistently integrate private

markets across their value chains
1 2 3

Client Service & Investment Offering & Operations &

Advisory Production Infrastructure

Offering shelf
RM Investment
Client Advisory Offering Legal & Operations Custody &
education & & risk
acquisition process structure 3rd party Co- Secon- compliance & IT reporting
incentives mgmt.
funds investments daries

9 CAPTURING WEALTH MANAGEMENT’S $3 TRILLION PRIVATE MARKET OPPORTUNITY

3. Increase the efficiency of internal operations

Tech platforms can provide a significant efficiency boost, but their adoption is best supported
with comprehensive streamlining of internal processes. One leading European wealth manager
reinforced its platform strategy with a simplified, risk-based control framework to handle large
numbers of less complex clients in its feeder funds, maximizing reuse of existing AML/KYC
data. The firm combined this approach with significant investment in integration with data
providers. Benefits included automated client reporting capabilities and reduced manual
processing. Through these efficiency gains, the firm was able to significantly increase its share
of clients with private markets investments without hiring more middle and back-office staff.

W hile many leading wealth managers already have a strong proposition along several
links in the private markets value chain, very few have optimized their involvement
across the board. As a result, they fail to realize the business’s full potential. In future, lead-
ing firms will adopt a holistic lens on their private market strategies, making more use of
digital solutions and embracing a broad and differentiated offering. Effectively implemented,
the outcome will be a private markets proposition that is ready for scaling.

BOSTON CONSULTING GROUP + ROYC 10

 About the Authors
Boston Consulting Group (BCG)

Akin Soysal, Managing Director & Partner,

soysal.akin@bcg.com

Michael Kahlich, Managing Director & Partner,

kahlich.michael@bcg.com

Omar Rahman, Principal,

rahman.omar@bcg.com

ROYC Group

Mathias Leijon, Founder & President,

mathias.leijon@roycgroup.com

Oscar von Reis, Founder & COO,

oscar.vonreis@roycgroup.com

Octavian Popescu, Founder & CEO,

octavian.popescu@roycgroup.com

Steffen Pihlmann, Head of Distribution Partners,

steffen.pihlmann@roycgroup.com

Johanna Jungner, Head of Investor Services,

johanna.jungner@roycgroup.com

Caspar Macqueen, Head of Business Development,

caspar.macqueen@roycgroup.com

For Further Contact

If you would like to discuss this report, please contact the authors.

11 CAPTURING WEALTH MANAGEMENT’S $3 TRILLION PRIVATE MARKET OPPORTUNITY

Boston Consulting Group ROYC
Boston Consulting Group partners with leaders in business ROYC is a leading European B2B financial technology
and society to tackle their most important challenges and company that provides a complete private markets
capture their greatest opportunities. BCG was the pioneer operating system, empowering private equity firms, banks,
in business strategy when it was founded in 1963. Today, wealth managers, and multi-family offices to seamlessly
we work closely with clients to embrace a transformational access, distribute, and manage private investments at scale.
approach aimed at benefiting all stakeholders—
empowering organizations to grow, build sustainable As private markets expand, financial institutions require
competitive advantage, and drive positive societal impact. scalable, technology-driven solutions to manage complexity,
optimizing fund operations, and delivering exceptional client
Our diverse, global teams bring deep industry and functional experiences.
expertise and a range of perspectives that question the
status quo and spark change. BCG delivers solutions ROYC combines state-of-the-art private markets technology
through leading-edge management consulting, technology with tailored fund structuring and investment solutions. Its
and design, and corporate and digital ventures. We work intuitive, scalable platform replaces manual processes with
in a uniquely collaborative model across the firm and automation and real-time data access, transforming how
throughout all levels of the client organization, fueled by the private market investments are managed across the entire
goal of helping our clients thrive and enabling them to make fund lifecycle.
the world a better place.

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