Major financial institutions including State Street and Apollo are significantly increasing allocations to private markets, signaling a structural shift in global capital deployment. This trend is reshaping asset allocation strategies and intensifying demand for private equity and infrastructure assets.
- State Street manages over $180 billion in private asset commitments since 2022
- Apollo has allocated $75 billion to private equity and infrastructure since 2023
- Private assets now represent 14% of global institutional holdings, up from 9% in 2020
- Mid-market private equity multiples rose to 13.5x EV/EBITDA in 2025
- SPY daily trading volume declined 3.2% over the past three years
- CL=F has seen altered risk premiums due to capital shifts toward energy infrastructure
A growing number of institutional investors are reconfiguring portfolios to include larger stakes in private markets, driven by persistent search for yield and diversification. State Street, one of the world’s largest custodian banks, has expanded its private markets platform to manage over $180 billion in private asset commitments since 2022. Meanwhile, Apollo Global Management has deployed more than $75 billion into private equity and infrastructure funds over the past three years, with over 40% of its current fund commitments directed toward non-public assets. The shift reflects a broader realignment in capital flows, as traditional public market benchmarks like SPY and XLF face increasing competition for institutional dollars. Private market assets now account for approximately 14% of total global institutional investment holdings, up from 9% in 2020. This trend is particularly pronounced in the financials and infrastructure sectors, where long-duration, stable cash flows are highly valued during periods of elevated interest rates. Market implications are already evident. The increased demand for private equity has driven up valuations in mid-market deals, with median enterprise value-to-EBITDA multiples rising to 13.5x in 2025, up from 11.2x in 2021. At the same time, public market liquidity has seen modest compression, with ETFs like SPY recording a 3.2% decline in daily trading volume over the same period. Energy-related equities, tracked by CL=F, have also experienced altered risk premiums as capital moves toward long-term infrastructure projects in renewables and energy storage. The transition underscores a fundamental change in investment strategy, with institutions prioritizing illiquidity premiums and inflation-resistant returns over the immediacy of public market trading. As private market access becomes more institutionalized, the divide between public and private capital efficiency is narrowing—reshaping global asset pricing dynamics and altering the risk-return profiles of major investment benchmarks.