Back to the Future: Tracking LP Portfolio Composition Over 20 Years

This month we’re shifting the focus of our analysis onto LP portfolio composition. Rather than looking solely at fund performance or fundraising totals to understand the market, we also view private markets through the lens of institutions and their portfolio decisions.

We want to answer how LPs are balancing different market segments and where they are putting the most capital based on total commitments. To do so, we analyzed snapshots of our LP universe every 5 years from 2005-2025 and viewed what percent of commitments went to different investment types.

For clearer analysis, we grouped our 10 investment styles into 4 asset classes: Private Equity, Private Debt, Real Assets, and ‘Other Styles’ (i.e., Secondaries, Fund of Funds, Co-Investments). One note to keep in mind; The main source for this data is public pensions, so it may not be indicative of future allocation trends of the overall market. Nonetheless, public pensions offer a view into a large stakeholder subset in private markets. 

Key Takeaways

Across the past 2 decades a hierarchy has developed, with Private Equity receiving the highest percent of commitments on average, at 45%. Real Assets follow at 31%, then Private Debt at 16%, and Other Styles occupying only 8%.

The most variance in portfolios occurred in 2010 and 2015, when Real Assets carved out more of the alternatives slice from Private Equity in the wake of the recession, even surpassing it in percent of commitments in both years. Private Debt also became more prevalent throughout the decade as that asset class reached its highest share at 25% in 2015.

Ultimately, those developments did not signal a permanent shifting of the tides, as the portfolio makeup in 2025 is now near identical to what was seen in 2005. That may suggest the makeup of Private Equity ~60%, Real Assets ~25%, Private Debt ~10%, and Other Styles ~5% is the default target, with 2010-2015 being outlier years as LPs navigated adverse economic conditions.

Looking Ahead

As the space evolves, it will be worth monitoring how the ratios change. Newer or growing strategies such as Evergreen and GP Stakes could change how LPs make their allocation decisions annually.

While Private Debt has been a rapidly growing asset class this decade, its overall share of portfolio composition has gone down from 2020-2025. This is due to private markets growing as a whole and may not indicate that Private Debt will continue to diminish.

This blog post is for informational purposes only. The information contained in this blog post is not legal, tax, or investment advice. FactSet does not endorse or recommend any investments and assumes no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained in this article.