A decade ago, private equity sat firmly out of reach for all but institutional investors and the ultra-wealthy. Clients are attracted by the potential for higher returns than traditional asset classes. Combined with lower barriers to entry and more liquid structures, this has helped drive broader adoption. The question now is whether banks can keep pace operationally
Why private equity is no longer a niche allocation
According to McKinsey’s Global Private Markets Report 2026, the conditions that supported easy returns over the past decade have passed. Private equity firms are having to create value through operational improvement rather than market timing alone. Banks distributing the asset class are facing their own shift: as client demand grows, operational scale becomes critical.
With more companies remaining private for longer, financing growth through private capital, or even skipping public listing altogether, investors expect options beyond public markets. By contrast, a portfolio limited to listed securities is closed off from a growing share of the global economy.
According to the 2026 Avaloq investor survey, 44% of affluent to ultra-high-net-worth investors already hold private market instruments such as private equity, venture capital or private debt, allocating an average of 6.6% of their portfolios to these assets. Among those who do not yet invest in private markets, 69% would be interested if offered access by their bank or wealth manager. Private markets are no longer a fringe holding. They already form a meaningful part of many investors’ portfolios, with demand set to grow further.
Private equity requires long-term management
Listed securities follow a largely standardized workflow: buy, hold, sell. Private equity does not. A client’s capital commitment is promised to the fund, not invested immediately. Instead, it is called over time, by the fund, on the fund’s schedule. From that point on, the bank has to manage capital calls, distributions, valuations, tax implications and eventually fund closure, often over several years.
Multiply that across a growing client base, and a bank is not holding one position per client. It is managing a long-running, multi-step process for each one, with new data generated at every stage along the way, from advisory to payments. Nothing about that lifecycle resembles the products most operating models were built around. Many existing processes, data structures and reporting frameworks were designed for listed securities with relatively straightforward transaction flows. Private equity exposes the limitations of those assumptions, making visible structural weaknesses that may already exist elsewhere in the organization.
How data and process fragmentation turns into operational risk
A consistent data foundation is crucial to meeting client expectations around private equity investments. Data is generated across multiple functions, from advisory and fund administration to payments and reporting. In many banks, those functions still rely on separate systems or manual workarounds, creating fragmented data sets that are difficult to reconcile and maintain over time.
With multiple areas potentially working from different versions of the same client’s position, inconsistencies and lack of visibility can lead to misalignment and errors. Advisory has one view. Fund administration has another. Reporting may be relying on yet another version of the same information. And in an asset class where the “position” itself keeps changing, those disconnects become harder to manage. If information cannot move consistently across advisory, operations and reporting, scaling the asset class quickly becomes challenging.
Manual workarounds do not survive scaling
A handful of private equity positions can be managed by hand, though that is likely to be a labour-intensive process. A growing book across hundreds of clients and dozens of funds, however, cannot. Capital calls need to be processed on time, commitments adjusted, distributions booked, reporting updated, all with a volume that rises every time a new client or fund is added.
These processes also do not stay contained within operations. Private equity touches multiple functions simultaneously, which means every manual step multiplies into a coordination problem, not just a workload problem within one team. Standardization is not a nice-to-have at this point, it is the only way growing volumes can be managed sustainably.
Meeting client expectations
Along with the increased complexity, client expectations are rising. Investors expect transparency, consolidated reporting and clear visibility on commitments, valuations, distributions and performance, in the same way as they get for their listed holdings.
And that expectation exists regardless of whether a bank’s internal systems can currently produce it. Banks that can deliver the same visibility and reporting standards for private equity as for listed assets will be better positioned to compete for a growing pool of private-markets investors.
So, what needs to change? Global private equity assets under management are forecast to rise by two-thirds by the end of the decade, according to PwC, so offering private equity as an asset class is just the first step. The real work is integrating private equity into the bank’s operating model across its full lifecycle: connected data, standardized and automated processes, and integrated reporting across all asset classes, rather than treating private equity as a separate workstream bolted on beside it.
Ultimately, nearly all banks will be able to offer clients access to private equity. As the asset class moves further into the mainstream, competitive advantage will belong to institutions with the data, processes and operating models needed to support it at scale.
