Morningstar: Private market firms face headwinds amid tariff-related fears

Private market firms have been hit harder by tariff-related fears than traditional asset managers and continue to face near-term headwinds, Morningstar has warned.

While traditional asset management firms are starting to recover from a period of downturn, private market firms face challenges in the short-term.

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After a record year last year, fundraising for European private equity firms is so far tracking lower this year as private market returns lag log-term averages, with the first quarter of 2025 fundraising weaker than the same period last year.

“After a blockbuster year in 2024, European private equity fundraising stumbled in early 2025, with first-quarter levels trailing well behind last year’s highs,” said Johann Scholtz, senior equity analyst at Morningstar.

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“The slowdown reflects broader liquidity pressures as limited partners grapple with muted exit activity, constraining their ability to recycle capital into new funds. Uncertainty around tariffs will exacerbate these pressures.”

Analysts said traditional European asset managers currently offer more upside than their private-market rivals. However, it suggested investors looking for private market exposure should consider Partners Group.

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