Private Markets Diverge: Infrastructure and AI Boom Amid Investor Caution

LONDON, UK – December 17, 2025 – A dramatic reallocation of capital is reshaping private markets, with investors flocking to infrastructure and artificial intelligence while showing significant caution in traditional strongholds like private equity and real estate. A new series of global reports from Preqin, a leading data provider recently acquired by BlackRock, reveals a fractured landscape where fundraising success and investor sentiment vary drastically across asset classes.

The findings, which consolidate data through the third quarter of 2025, underscore a complex environment defined by a search for liquidity, a hunger for high-yield opportunities, and persistent concerns over economic volatility. While some sectors are experiencing record-breaking growth, others face a challenging fundraising climate and an uncertain path to realizing returns.

The Great Capital Reallocation: Infrastructure and Private Credit Surge

The standout performer in 2025 has been infrastructure, which has seen a torrent of new investment. According to Preqin's data, aggregate capital raised for the asset class surged by an astonishing 70% year-on-year in the first three quarters of 2025. This influx has already pushed fundraising past the full-year total for 2024, making it the only private asset class to do so in this period. This performance is bolstered by strong, stable returns, with infrastructure delivering annualized returns between 9% and 11% over one-, three-, and five-year horizons as of June 2025.

Industry analysis from other sources corroborates this trend, attributing the boom to powerful secular drivers like the global energy transition, digitalization, and the immense power demands of the burgeoning AI industry. With 40% of surveyed investors planning to increase their commitments to infrastructure in the next 12 months, and Western Europe cited as a particularly attractive region, the momentum appears set to continue into 2026.

Private credit has also emerged as a favored destination for capital. The reports highlight a significant geographical shift, with funds targeting Europe capturing 46% of global fundraising in the first three quarters of 2025—a dramatic jump from just 23% in 2024. This pivot is driven by a combination of supportive fiscal policies, easing monetary conditions in the region, and a move by U.S. investors to diversify away from domestic volatility. Direct lending continues to dominate the space, accounting for 61.5% of capital raised. Investor appetite remains robust, with 81% planning to either maintain or increase their allocations to private credit over the coming year, and a growing interest in higher-yield strategies like distressed and asset-backed lending.

AI Dominates Venture Capital Amid Fundraising Drought

The venture capital landscape presents a stark paradox. On one hand, artificial intelligence is consuming an unprecedented share of investment, accounting for over 50% of aggregate VC deal value through Q3 2025. The AI frenzy has propelled funding for foundational model companies like Anthropic and xAI, as well as AI hardware and semiconductor firms, to new heights. Venture-growth pre-money valuations for AI companies have skyrocketed, signaling sustained investor belief in the technology's transformative potential.

On the other hand, the broader VC ecosystem is struggling. Overall fundraising remains sluggish at just $64.4 billion through the third quarter, representing only 48% of 2024’s total and putting the industry on pace for its weakest year in a decade. This capital scarcity creates a challenging environment for startups outside the AI halo.

However, a glimmer of hope is emerging from the exit market. Total exit activity reached $171 billion through Q3 2025, the highest level since the market peak in 2021. A recent wave of high-profile IPOs from venture-backed companies has begun to return much-needed capital to limited partners, a trend that could help thaw the frozen fundraising market if it continues into 2026.

Caution and Concern Haunt Private Equity and Real Estate

In contrast to the exuberance seen in infrastructure and AI, a mood of caution pervades the private equity and real estate sectors. While global private equity fundraising reached a respectable $507 billion in the first three quarters of the year, a significant portion of activity is being driven by a desperate search for liquidity. Secondaries funds, which buy stakes in existing funds from other investors, accounted for 15% of all fundraising—nearly double the five-year average—as limited partners seek ways to cash out of long-term commitments.

The primary source of anxiety is the stagnant exit environment. An overwhelming 80% of surveyed investors identified exits as one of their top concerns for the next 12 months. With fewer buyouts and IPOs, general partners are struggling to return capital, creating a logjam that hampers their ability to raise new funds.

A similar sense of apprehension hangs over real estate. Although global fundraising hit $127 billion, nearly matching 2024’s full-year total, investor sentiment is deeply divided. While 27% of investors plan to increase their commitments, a slightly larger group of 30% plans to reduce them. The dominant concern remains interest rates, cited by 64% of respondents, even as central banks have begun an easing cycle. While some see opportunity in distressed assets, the broader market recovery is not expected to gain significant traction until 2026, with Europe and Asia-Pacific predicted to lead the way.

BlackRock's Data Edge in a Complex Market

The release of these detailed market insights comes as Preqin operates under new ownership, having been acquired by investment giant BlackRock earlier in 2025. The move is seen by industry observers as a major strategic play to dominate the information landscape in the increasingly important private markets sector.

The integration of Preqin's granular data into BlackRock's powerful Aladdin technology platform promises to provide clients with a holistic, data-driven view across their entire public and private market portfolios. In an investment world characterized by the divergent trends highlighted in the reports, the ability to analyze risk, performance, and opportunity with such comprehensive data provides a significant competitive advantage.

As investors navigate a landscape of soaring valuations in some corners and liquidity crunches in others, the strategic value of timely and accurate intelligence has never been higher. This deep integration of data and technology is becoming a key differentiator for firms aiming to successfully manage capital through the complex and shifting dynamics that will define the private markets for years to come.