European institutions turn to private markets as BlackRock accelerates growth amid rising volatility

European institutions are moving decisively into private markets as a hedge against what BlackRock describes as “a new regime of higher volatility”, even as the world’s largest asset manager accelerates its own push into the sector.

According to the Financial Times, Dominik Rohé, deputy head of international business at BlackRock, said clients in Europe, the Middle East and Africa accounted for about 35 per cent of the firm’s private asset fundraising last year, and that amounts raised from institutions in the region rose by more than 50 per cent in absolute terms from 2024. Rohé told the FT that pension funds and other institutional investors have been shifting away from public equities and bonds towards private assets “as they recognise that we are in a new regime with higher volatility and different correlations between bonds and equities.”

BlackRock has been building the capability to capture that demand aggressively. The firm has bought Global Infrastructure Partners, HPS Investment Partners and data provider Preqin in the past two years, moves intended to bolster its infrastructure, private credit and data analytics capabilities. Industry reporting and BlackRock presentations indicate the firm is targeting $400bn in private market fundraising by 2030 as a central plank of plans to expand revenue and market value. According to Nasdaq and Bloomberg coverage of BlackRock’s investor messaging, private markets are expected to play a leading role in the company’s ambition to double certain financial metrics and to grow revenue materially by the end of the decade.

The rationale is straightforward: private assets can offer early, diversified exposure to areas seen as driving long‑term growth , from infrastructure backing artificial intelligence to cash‑flowing businesses that have chosen to remain private longer. Rohé said institutions “also see the opportunity to achieve early and diversified access through private markets into areas that are driving the economy, such as the infrastructure that will support the growth of AI as well as cash flowing businesses that have chosen to stay private for longer”, according to the FT.

Growth to date has been tangible. BlackRock this week reported strong inflows into its private markets unit, with private credit attracting $7.2bn and its infrastructure investment unit drawing close to $5bn in three months, and the firm now holds $322.6bn of assets under management in private markets, contributing to a record $14tn total AUM, the FT reported.

Yet the shift brings risks and trade-offs. Private markets are priced less frequently than public securities and can be “more opaque to evaluate”, Rohé warned, a concern echoed across commentaries on the sector. The less frequent valuation cycle and lower liquidity profile mean investors may face valuation uncertainty and difficulty selling assets quickly. Those limitations are particularly material for investors used to the liquidity and price discovery of listed markets.

Regulatory and market developments have also fed demand. Geopolitical tensions and policy uncertainty have raised volatility in public markets , exemplified by sharp sell‑offs linked to trade policy moves , encouraging some institutional investors to seek assets whose returns are less correlated with public equities and bonds. BlackRock and other large managers are pitching private markets as a way to access long‑term, diversified returns and to support assets seen as strategically important to future economic growth.

The expansion strategy is backed by sizeable deals. Axios reported that BlackRock agreed to acquire HPS Investment Partners for $12bn in stock, a transaction scheduled to close in mid‑2025 subject to regulatory approval, a deal that would markedly enlarge BlackRock’s private credit footprint. Industry coverage and company statements indicate the acquisitions of Global Infrastructure Partners and Preqin are intended to give BlackRock scale in infrastructure and the proprietary data and analytics to underwrite and distribute private strategies more broadly.

Market observers note the structural shift in ownership: across the EU and UK, Rohé said more than 90 per cent of companies with annual revenue over $100mn are privately held, underscoring why asset managers see private markets as a fertile area for institutional allocation and product development.

BlackRock’s drive illustrates a broader industry trend: asset managers are diversifying away from traditional public markets and fee models towards alternatives that command higher fees and deeper client relationships. According to market reporting, that repositioning is part of BlackRock’s stated aim to grow its revenue base and market capitalisation materially by the end of the decade, with private markets a focal point.

Still, the trade‑off between potential higher returns and reduced transparency and liquidity will shape whether the current momentum endures. As BlackRock scales up product offerings and buyers allocate more heavily to private assets, investors and regulators will be watching valuation practices, liquidity management and the degree to which private markets deliver the diversification and resilience institutions expect in a more volatile macroeconomic and geopolitical environment.