2023 Private Markets Investor Sentiment Survey

Institutional investors continue to increase allocations to private strategies – but with some cautiousness and an increasingly targeted approach.

CF Private Equity’s sixth annual private markets investor sentiment survey shows continued trends despite potential economic and investment turbulence ahead in 2023. At the end of December 2022, CF Private Equity conducted its annual, year-end private markets survey of institutional investors and advisors.

Survey responses totaled over 150 investors, representing over 250 institutions and over $2 trillion of investable assets. The survey covered three areas:

  • Headline concerns related to private equity and private capital investments
  • Allocation trends to various illiquid private capital strategies
  • Performance potential of commitments to various private capital strategies in 2023

The following is a summary of the results and implications.


Respondents generally identified four main concerns specific to the private capital markets:

  1. High purchase price multiples remained the top concern for investors – 68 percent of respondents indicated this was somewhat-to-very concerning; this was equal to last year’s percentage.

  2. The overall direction of industry fees and terms – 46 percent of survey participants are somewhat-to-very concerned, which is up from 41 percent last year, suggesting a heightened concern from a year ago.

  3. Transparency – 40 percent are somewhat-to-very concerned. Investors were more concerned about transparency this year versus last year when the percentage was 29 percent. While illiquid private strategies have become more core holdings, investors are signaling that there is room for improvement in transparency.

  4. Growth of the industry’s fund sizes – 39 percent are somewhat-to-very concerned.  This represents slightly more concern from the 37 percent from the prior year.

We share these views and factor them into our portfolio positioning and investment points-of-view across primaries, secondaries, and co-investments. For example, within the buyouts arena, we have observed better pricing in the smaller end of the market and, as a result, our recent buyout and growth equity programs have had a distinct tilt toward small- and medium- sized funds that are focused on smaller companies.

In this year's survey, over one-third of participants took the time to add additional comments related to their concerns – both specific to the private markets and to the investment environment more generally.

Four themes are worth noting.

  1. Inflation, interest rates, recessionary fears and other macroeconomic factors that can impact the private markets

  2. Geopolitical and economic tensions with China

  3. Increasing supply chain ruptures and the threat of increasing cyber security breaches

  4. Energy stress and climate change

While we share the importance of understanding, modeling, and managing these risks, we also believe that each of these areas may present a targeted set of investment opportunities when partnering with skilled private equity and venture capital managers.

Top Investor COncerns



With a significant level of investor concerns, we anticipated this year’s allocation trends to be relatively flat overall. However, the year-over-year survey data reflect an overall increase in planned allocations to private market strategies. This represents a continued upward trend that we have witnessed from prior survey results.

Looking more closely at the data, 91 percent of survey participants indicated that their allocations to U.S. private equity small / medium sized sector specialist funds would be trending up or flat, and, relatedly, 90 percent of participants indicated that their allocations to U.S. private equity small / medium sized generalist funds would be trending up or relatively flat. This level of interest in small / medium sized U.S. private equity funds was similarly seen in last year’s data. These were followed by co-investments, where 85 percent of the investors indicated that their allocations would be flat to up.

The leading single strategy where investors reported their planned allocations would be trending up the most was U.S. private equity small / medium sized sector specialist funds, where 36 percent of the participants indicated an increased allocation this year.  This was followed closely by private credit at 35 percent. This is the first year we witnessed private credit as a top four allocation destination. The next two strategies with increased allocations were co-investments and secondaries, each at 27 percent.


Investors again ranked U.S. buyout small/and medium sized sector specialist funds as highest in terms of performance potential for commitments made this year, with 64 percent of survey participants anticipating above average or high return potential, slightly from last year when it was 63 percent. We note that one-fifth of respondents indicated this strategy as their top expected performer for commitments in 2023. Sector specialists was followed by small/middle market generalist funds where 55 percent of participants anticipate above average or high return potential. We believe that the return potential for these two strategies is a driver for the increase in the asset allocation targets and commitments to these strategies.

Following these small/middle market strategies with above average and high return potential are venture capital, co-investments and secondaries with survey participants anticipating above average or high return potential at 47, 42 and 41 percent respectively. While venture capital is the third highest return potential strategy in this year’s survey, with 47 percent of the participants rating it with above average and high return potential, this year’s return expectation is more muted than the 63 percent one year ago.

From a return expectation perspective, the three strategies that increased the most year-over-year were:

  • Private credit, where 34 percent of investors indicated above average to high return potential versus just 21 percent a year ago;
  • Secondaries, where 41 percent of investors indicated above average to high return potential versus 32 percent a year ago; and
  • Natural resources, where 35 percent of the respondents indicated above average to high return potential this year versus 24 percent a year ago.

As noted, investors shared that they continue to see more robust return potential when working with sector specialist firms where general partners take a more “hands-on” approach with their portfolio companies over generalists. We agree — and we practice this active management theme across our buyout, growth equity, venture capital, and real assets and sustainability strategies.

Performance Potential By Strategy



In looking more closely at the risks and concerns, upward trends in overall allocations, and strategies where investors see higher return potential, we observed four, interrelated characteristics:

  • A growing number of organizations that have recently adjusted upward their target ranges for private capital strategies are being more targeted in their planned commitments and execution;
  • Increasingly, we see limited partners understanding the need to be consistent investors cycle over cycle and not to try to time markets;
  • We see a distinct and growing interest in finding and accessing sector specialists with more modest fund sizes that target small and medium-sized companies; and
  • The data, comments and conversations indicate a growing number of investors seeking to both (i) manage risk and (ii) secure attractive returns in the private markets as opposed to the public markets this cycle. It is the point of view of many investors that more active management may not only contribute to returns this cycle but also serve as a risk management factor and a diversifier to more passive elements of their total portfolios.

Editor’s Note: Commonfund would like to thank the members of the CF Private Equity Executive Council for their guidance in this survey and express our gratitude to investors who took the time to share their input; please know that your participation is valued and appreciated.


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