Private markets: a strategic imperative for swiss wealth managers

Private markets have undoubtedly moved on from being a niche allocation to a core driver of long-term wealth creation for private investors. Swiss wealth managers, who serve increasingly sophisticated clients, are perfectly positioned to benefit from this structural shift.

With higher inflation, subdued public markets, and global transitions transforming the economy, private equity, private credit, real estate and infrastructure are today among the most compelling long-term investment themes. Let’s explore the latest trends shaping each section of this dynamic segment of the investment market.

Kayte Hodgson Senior Investment Specialist, Private Markets Group,             Union Bancaire Privée

Private Equity: Mid-Market Buyouts Deliver Superior Value

Despite headlines dominated by mega-deals – such as the USD 55 billion buyout of Electronic Arts in 2025 – the most compelling returns in private equity come from the middle market. Mid-market buyout funds have outperformed large-cap funds by 5–7% annually over the past decade[1], and the probability of achieving 2.5 times capital or more is significantly higher among lower-mid-market funds[2].

The reasons are structural: mid-market companies trade at 16–25% lower entry valuations[3] and historically generate 25% greater multiple expansion from purchase to exit[4]. Yet while 92% of private companies are mid-market, 74% of private equity capital targets only the top 8% of firms[5], creating an attractive supply-demand imbalance.

Demographics intensify this trend: over 50% of US SMEs are owned by retiring baby boomers[6], while only 34% have succession plans[7], which makes for a long pipeline of motivated sellers. Combined with numerous exit routes (larger private equity firms, strategic buyers, or even going public), the mid-market continues to offer disciplined investors compelling alpha.

Alternative Credit: CMBS Distress Creates Entry Point

2025 has seen a meaningful rebound in commercial mortgage-backed securities (CMBS) issuance: USD 30.68 billion in Q3, and USD 90.85 billion year-to-date[8]. The acceleration is driven by single-asset, single-borrower (SASB) transactions, which have totalled USD 67.5 billion for the year to September[9] and typically feature higher-quality collateral and lower leverage.

At the same time, combined CMBS delinquency and special servicing reached 11.28% in September, historically high versus sub-5% pre-2024[10]. Distressed credit managers see mispricing across segments: offices under the most pressure, multi-family and retail stabilising, and industrials remaining strongest. Slight improvements in delinquency suggest the market may be at an inflection point, favouring investors entering before spreads compress.

Private Real Estate: Retrofit Strategies Unlock Office Value

Rising rates have sharply slowed commercial property transactions, and offices – once 39% of real estate volume – now account for only one quarter[11]. Yet value-add opportunities remain. Capital is gradually returning to prime CBD (central business district) offices, and retrofitting older buildings to meet new sustainability and efficiency standards has emerged as a powerful route to value creation.

Three conditions determine success:

• Disciplined acquisition pricing in supply, particularly in constrained European CBDs
• Technical and ESG expertise to control retrofitting costs under evolving regulation
• Clear exit strategies, with strongest liquidity for EUR 25–100 million lot sizes

When executed with full in-house construction and asset-management capabilities, this strategy can deliver compelling returns in a segment many investors abandoned prematurely.

Private Infrastructure: The Transition Decade

Infrastructure is entering a super-cycle: USD 3.3 trillion is expected to be invested globally in clean energy and infrastructure in 2025, including USD 2.2 trillion in renewables, electrification and storage[12]. Fundraising has accelerated, with USD 134.3 billion in the first half of 2025, the second-strongest semester in six years[13].

Megatrends – digitalisation, electrification, climate adaptation, urbanisation – supported by regulatory tailwinds are reshaping the investment landscape. Infrastructure offers inflation protection, low volatility and resilient yields, while enabling investors to direct capital to essential transitions such as renewable power, smart grids and sustainable transport.

A Growth Engine for Swiss Wealth Managers

Private markets today represent not only a source of diversification, but a decisive driver of long-term wealth for sophisticated private investors. Swiss wealth managers who integrate them strategically will reinforce their value proposition and strengthen client retention across generations. Union Bancaire Privée has been an early mover in the private markets space, offering its partner wealth managers institutional-grade access to private markets backed by deep sector expertise, strong sourcing and disciplined portfolio selection across private equity, private credit, value-add real estate and infrastructure transition solutions.

For Swiss wealth managers aiming to future-proof client portfolios, the private markets decade has already begun.

Biography

Kayte Hodgson joined UBP in 2023 as a Senior Investment Specialist within the Private Markets Group, covering the infrastructure, real estate and debt asset classes. Prior to joining UBP, Kayte worked for Swiss Life Asset Managers in Zurich as a Senior Product Specialist for private infrastructure, and at Partners Group in Zug, where she again focused on fund marketing, fundraising and investor relations for private infrastructure solutions. Before moving to Switzerland, she worked for seven years in public equities investor relations in London. Kayte holds a bachelor’s degree in Political Studies from the University of Leeds and has qualified for the Certificate in Investor Relations from the Investor Relations Society, London.

[1] Preqin Global Private Markets Report 2024

[2] Preqin data 2005-2019, via UBP analysis

[3] PWC Private Equity Outlook 2023

[4] GCM Grosvenor

[5] Pitchbook 2025

[6] US Census Bureau

[7] PWC Family Business Survey 2021

[8] CRED iQ: CRED iQ Market Update: Navigating CMBS Distress and Broader CRE Trends in Q3 2025

[9] Trepp

[10] CRED iQ: CRED iQ Market Update: Navigating CMBS Distress and Broader CRE Trends in Q3 2025

[11] BNP Paribas 2025

[12] The Wall Street Journal: Clean Energy Investment Set to Double Fossil Fuel Financing in 2025, IEA says

[13] Preqin Q2 2025