Private Assets: a key of diversification and performance
Marcus Thiel
CIO / Global Head of Customized Solutions Prime
at BNP Paribas Asset Management Alts
Edmund Shing
Global Chief Investment Officer
at BNP Paribas Wealth Management
In a world shaped by geopolitical tensions, higher interest rates and accelerating technological change, building a resilient portfolio has never been more important. Yet many of the opportunities driving the global economy today lie beyond traditional stock and bond markets.
At the Musée Bourdelle in Paris, Edmund Shing, Global Chief Investment Officer of BNP Paribas Wealth Management, sat down with Marcus Thiel, Chief Investment Officer of BNP Paribas Asset Management Alts, to discuss the growing role of private markets in diversified portfolios and the opportunities they see for investors in the years ahead.
Looking beyond market volatility
Following a period of price adjustment, European real estate markets appear to be stabilising. Limited development activity in recent years has also created supply constraints in certain segments, supporting the longer-term investment case
Accessing parts of the economy that public markets miss
One of the strongest arguments in favour of private markets is simply their breadth.
In Europe, around 90% of companies employing more than 250 people remain privately owned. Entire sectors of the economy, from residential housing to large parts of infrastructure, are often far more accessible through private markets than through public exchanges.
These assets can bring diversification benefits because they tend to behave differently from listed equities and bonds. They also provide exposure to tangible economic activity and long-term investment themes.
As Marcus Thiel points out, private markets are increasingly becoming a key building block in modern portfolio construction rather than a niche allocation.
Structural trends create long-term opportunities
Several powerful forces are driving demand for private capital.
Europe’s energy transition, the push towards decarbonisation, digitalisation, data infrastructure and the strengthening of local supply chains all require significant investment. Much of this financing is expected to come from private investors rather than public markets.
These trends are particularly visible in infrastructure, where long-term projects can generate tangible cash flows while benefiting from multi-year growth drivers.
For investors willing to take a long-term view, such themes offer opportunities that extend well beyond the next economic cycle.
Why Europe is attracting renewed attention
While the United States remains the largest private markets ecosystem globally, Europe is becoming an increasingly compelling destination for investors.
The emergence of what Marcus Thiel calls “Europe 2.0” reflects a new investment cycle fuelled by structural reforms, digitalisation and decarbonisation efforts.
The scale of investment required is substantial. According to BNP Paribas Asset Management Alts, Europe faces a significant funding gap that private capital will help to bridge.
At the same time, valuations in many European private market segments remain lower than in the United States, offering investors potentially more attractive entry points.
The European mid-market is particularly appealing. Less crowded than larger buyout markets, it often provides access to businesses with strong growth potential at more reasonable valuations.
For investors seeking long-term opportunities, Europe offers a combination of structural growth drivers, attractive valuations and increasing investor interest that is difficult to ignore.
While private markets are often discussed as a single category, they encompass several distinct investment opportunities.
Real Estate: signs of recovery
Following a period of price adjustment, European real estate markets appear to be stabilising. Limited development activity in recent years has also created supply constraints in certain segments, supporting the longer-term investment case.
Infrastructure: benefiting from structural tailwinds
Infrastructure continues to benefit from some of the most powerful trends shaping the global economy, including renewable energy investment, digital connectivity, data infrastructure and strategic autonomy initiatives.
The substantial capital required to fund these projects is expected to support long-term demand for private infrastructure investment.
Private Credit: looking beyond the headlines
Private Credit remains another area of interest. Although there have been concerns about parts of the US market, Marcus Thiel stresses the importance of separating short-term market noise from underlying fundamentals.
In his view, disciplined underwriting, rigorous credit analysis and broad diversification across strategies remain essential. Opportunities extend well beyond direct lending and include real estate debt, asset-based finance and regulatory capital solutions.
Private Equity: creating value through transformation
Private equity is also evolving. Higher financing costs mean that successful managers can no longer rely on financial leverage alone to generate returns.
Instead, value creation increasingly comes from improving operations, enhancing technology, entering new markets and strengthening businesses from within.
In the current environment, strategies such as secondary transactions and flexible equity solutions may offer investors improved visibility on future cash distributions.
Global expertise and local insights: let our team guide you
At BNP Paribas Wealth Management, we have extensive experience in private markets. Our team rigorously analyses and selects funds, and carries out post-investment monitoring. We emphasise the importance of conducting thorough due diligence and understanding the specific terms and conditions of each fund. Moreover, we advise our clients to make investments that align with their expectations, investment profile and knowledge of private markets.
For more information, please contact your relationship manager.
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