By Aaron Filbeck, CAIA, CFA, CFP®, CIPM, FDP
Managing Director, Global Content Strategy, CAIA Association
Last month, I wrote about the immense opportunity in private wealth management for GPs. If you missed it, the takeaway was clear: even a small shift in market penetration can drive staggering AUM growth. Unsurprisingly, the push into the wealth channel has been a major focus for the asset management community over the past decade.
At the same time, we’re seeing a small but influential group of wealth management firms move beyond the introductory phase and into what I have called the "second wave of democratization." These firms truly "get" private markets, and the conversation has shifted from fundamentals to strategic implementation with deeper insight and thoughtfulness.
After experiencing this firsthand at the third annual CAIA Association/Institutional Investor Alternatives in Wealth Management Forum, I wanted to share a few key takeaways highlighting these early adopters' growing sophistication.
Early Adopters: A More Advanced Approach
Back in the early 2020s, discussions with the wealth channel primarily centered around the foundational role of private markets in portfolios. Of course, this was a necessary starting point for newcomers, but the delta between institutional and wealth was massive. Fast forward to today, it seems like some of the largest wealth management firms are in a different place entirely.
While not every organization is at the same stage, a distinct cohort of early adopters is thinking about public and private portfolio construction in a more integrated way—seeing it as a spectrum of opportunity rather than a collection of bolt-on solutions.
Rather than covering the basics of private capital, real assets, or hedge funds, larger RIAs, multi-family offices, and aggregators are now focused on more sophisticated strategies like NAV lending, GP stakes, niche managers, international and emerging markets, and even direct investments. At times, I felt like I was at an institutional asset owner conference!
There’s still a significant number of newcomers to private markets within the wealth space, but it’s encouraging to see strong examples being set by those who have adopted early. Their approach is marked by long-term thinking, a client-first mentality, and a healthy level of scrutiny—all signs of a growing and sophisticated market.
Asset Classes: A More Thoughtful Approach
Another interesting shift was in the perception of trending asset classes. In the early 2020s, it was impossible to attend a conference without encountering bullish panels on crypto or private credit. Now, the conversation has become far more nuanced.
Yes, private credit still had secular support, but investors were more interested in exploring smaller deals, asset-based lending, and specialty finance instead of simply piling into mega funds that are pursuing direct lending – an arena they thought was overcrowded and untested in the short-term.
Additionally, instead of chasing the hottest asset class, investors showed renewed interest in areas that have fallen out of favor or were up-and-coming, such as certain segments of real estate, venture capital, and infrastructure. This level of analysis suggests a more discerning and sophisticated investor base.
Product Development: It’s Complicated
Investment vehicles remain a complex topic for private market investors. The discussion around semi-liquid structures continued, but with a more informed perspective. Instead of simply learning how these structures work, the conversation focused on whether they are truly appropriate for clients.
One thing really surprised me: the drawdown fund is far from dead. For all the convenience of registered semi-liquid funds, if clients can access “true private structures,” they should be on the table for investment. Semi-liquid fund vehicles function more as an access point than a wholesale replacement for traditional lock-up vehicles—a key distinction that often gets lost in the broader industry narrative.
Tech Stack and Communication: The Journey Continues
Of course, implementation challenges remain.
First, the tech stack is still highly fragmented, making it challenging to scale private markets programs within firms efficiently. Performance reporting, commitment pacing, cash flow management, and data aggregation were all recurring pain points raised by CIOs. Many discussions revolved around making operations more seamless for both clients and advisors.
Second, advisor education and client communication remain critical hurdles. While the room was filled with investment professionals, a recurring theme was the need to frame the right narrative for advisors to relay to clients—keeping them invested through appropriate storytelling. Some firms succeeded in making investments tangible through deal-specific stories, while others took a more abstract approach. Unfortunately, the entire investment industry—across both public and private markets—has yet to master the art of storytelling…maybe someday.
Putting It All Together
While this conference represented a small subset of RIAs and family offices, it’s clear that parts of the wealth channel are making meaningful progress in adopting private markets. I fully recognize that this is a small portion, but it’s encouraging to see the evolution for those that have adopted early…it means there’s hope for those beginning today. The level of analysis and scrutiny is increasing, and while inefficiencies remain, investors are approaching the space with a more informed and deliberate mindset.
There’s still plenty of work to be done, but for those paying attention, the momentum is undeniable.
About the Contributor
Aaron Filbeck, CAIA, CFA, CFP®, CIPM, FDP, is Managing Director, Global Content Strategy at CAIA Association. His industry experience lies in private wealth management, where he was responsible for asset allocation, portfolio construction, and manager research efforts for high-net-worth individuals. He earned a BS with distinction in finance and a master of finance from Pennsylvania State University.
Learn more about CAIA Association and how to become part of a professional network that is shaping the future of investing, by visiting https://caia.org/