Jean‑Pierre Legrand, en charge de la practice Asset Servicing et Asset Management (Photo: BearingPoint Luxembourg)

Jean‑Pierre Legrand, en charge de la practice Asset Servicing et Asset Management (Photo: BearingPoint Luxembourg)

The retailisation of private assets is gaining momentum. With no tangible evidence that these funds are delivering on their promises, the industry risks turning a historic opportunity into a crisis of confidence.

Private asset funds are key drivers of value creation. Long reserved for institutional investors, these assets are now becoming accessible to a wider client base. The retailisation of private assets is well under way.

These funds are not simply less liquid. They are based on long, fragmented and non-linear life cycles, punctuated by interim valuations based on models and assumptions. In this context, a periodic NAV does not, on its own, reflect the economic reality of an investment.

A fund’s actual performance is determined by taking into account all cash flows over the entire duration of the investment cycle, which can sometimes be very long. IRR, DPI and TVPI are only meaningful if they reflect the actual conversion of value into cash, rather than the accumulation of indicative interim valuations.

The widespread adoption of distribution models via private banks and nominee structures has broadened access, but at the cost of shifting operational complexity. Fragmented, tax-individualised flows place a strain on systems designed for standardised products. Technological initiatives aimed at standardising execution are necessary, but insufficient.

The real issue lies elsewhere. The growing concentration of data (actual cash flows, observed distributions, successive valuations) is creating the conditions for a paradigm shift: funds will no longer be judged on their relative performance, but on their ability to deliver on their initial promises. Stated duration versus actual duration, target returns versus actual returns, consistency between published figures and cash distributed: these discrepancies can be objectively measured.

The retailisation of private assets can only be sustainable if the industry embraces this change. Technology will act as a catalyst, provided it does not merely automate existing processes. The real challenge lies in putting economic reality and the fulfilment of commitments back at the heart of the relationship between funds, distributors and investors. Without this, the democratisation of private assets risks facing a crisis of credibility.