What's defining private markets in 2026: Scale, partnerships, diversification

In the world of private asset management, scale is not just a metric of size but an essential factor that drives performance and success. Deborah Shire, Deputy Head at BNP Paribas Asset Management Alts, delves into why scale is crucial when managing private asset portfolios for private wealth clients, especially within the European context.

The multifaceted nature of scale

In the interview, Shire emphasizes that scale is not merely about volume but also about effective sourcing – a key component in maintaining diversification and selectivity. As private markets evolve, the time taken for execution and due diligence is increasing, making scale a necessary element in delivering consistent performance.

In Europe, scale is tied to having a presence close to the ground. This means leveraging local networks and understanding diverse asset classes and geographies. This approach adds value across European opportunities, backed by a strong track record spanning 25 years.

Emerging partnership models in private assets

The dynamics of the private assets landscape are shifting, leading to new partnership models. As consolidation speeds up, notable transactions like the acquisition by BNP Paribas, combining with AXA IM and BNPP, have positioned the group as a major player in European alternative assets globally, second only to the foremost North American firms.

These partnerships offer a unique setup where different financial entities – such as insurance balance sheets and banking channels – interconnect. This infrastructure provides the capability to efficiently source, execute, and manage portfolios.

Navigating private credit exposure in dynamic markets

The demand for private credit remains robust, despite market fluctuations. Shire highlights the importance of diversification within private credit, a strategy that mitigates risks and ensures consistent cash flows. This approach is vital, especially amid banking disintermediation in Europe.

With a platform managing €135 billion in alternative credit, comprising direct lending, asset-based lending, and more, diversification stands as a pillar of success in serving wealth clients efficiently.

Strategic convictions in private markets

At the midyear point of 2026, liquidity and distributions-to-paid-in (DPI) ratios in private equity are anticipated to persist as relevant concerns. Shire stresses the need for strategies that offer transparent cash flows over shorter periods. European lower mid-markets present such opportunities with more controlled exits and valuations than their upper middle market counterparts.

Additionally, thematic strategies, like those focusing on healthcare, and secondary strategies that offer mature assets with clear value propositions, support the drive for robust liquidity.