In a Goldman Sachs Alternatives survey of 225 institutions, 84% plan to deploy as much or more capital as last year, while a lack of distributions ranked as the top constraint. More than half say they are underweight private credit, and a fully liquidated European lending fund shows what a finished vintage actually paid.
The investors who fund private equity, private credit and infrastructure are not retreating. They are waiting to be paid.
Goldman Sachs Alternatives surveyed 225 limited partners and institutional investors between June and August. Its results, published on Oct. 22, found that 84% plan to deploy the same amount of capital or more in private markets than last year. That includes 37% who plan to invest more, down from 43% a year earlier, and 47% who expect to invest the same. Only 11% plan to invest less, down from 14%.
The most-cited factor shaping those plans is the lack of distributions, named by 35% of respondents, up from 31%. Liquidity was also the top challenge cited for private equity, at 28%.
Underweight private credit, and wary of it
The survey's most striking result is in private credit. Some 56% of investors said they are under-allocated to the asset class, up from 43% in 2025. Only 4% said they are over-allocated, down from 12%.
Yet private credit also recorded the largest year-on-year increase in negative sentiment of any asset class, at 35%. Most investors still see opportunity: 65% said they view opportunities in the asset class as the same or better.
The two findings fit together. Investors have room in their portfolios for more private credit, and growing doubts about parts of it. Infrastructure, at 49% under-allocated, private equity at 37% and real estate at 36% follow.
The survey predates October
The fieldwork ended in August, before this month's slide in credit markets, wider high-yield spreads and pulled bond and loan deals. The results describe investors' intentions before that stress, not their reaction to it.
Secondaries are the release valve
When distributions are scarce, investors look for other ways to get cash back. Views on secondaries, the market for buying and selling existing fund stakes, were positive for 44% of respondents and negative for 15%.
Money is following that view. Vintage Investment Partners said on Oct. 21 that it raised $920 million across a fund-of-funds and a secondary fund, bringing its assets above $4.8 billion, and that it plans to back fewer venture managers.
What a finished fund pays
The distribution question is easier to judge with a fund that has actually finished. Tikehau Capital said its third direct-lending fund, launched in December 2014, has been fully liquidated. It lent to 31 companies and produced a gross internal rate of return of 9.4% and a net return to investors of 8.1% a year. Tikehau has returned 2.2 billion euros to its fund investors so far this year, including 1.1 billion euros in the third quarter.
Most private credit returns quoted today come from funds that are still running, where performance depends partly on how managers value loans not yet repaid. A liquidated fund's return is realized, not estimated. It also comes from a vintage deployed at different prices and terms than the loans written in 2024 and 2025, and the industry's own participants are cautious about the next stretch: in a global private credit survey published this week, PitchBook found that respondents ranked default risk and market stress as the top challenge for the next six months.
Two readings
The constructive reading is that institutional commitment to private markets is intact, and that capital will flow once exits pick up and distributions resume.
The cautious reading is that the binding constraint is the same one that has held for two years. Investors cannot commit new money until old money comes back, and the credit conditions of October make it harder for managers to sell companies and return capital.
What to watch
Fourth-quarter distribution data from large managers, secondaries fundraising and pricing, and whether investors who say they are underweight private credit act on it while sentiment toward the asset class is falling.