Q: A lot of advisors have been asking lately for help in making the case for private markets: “Where do I start?”
A: Start by showing them the historical higher returns, lower relative risk, and more controlled outcomes.
One of the clearest ways to make the case is with a simple chart comparing risk and return across asset classes over 20-plus years. It’s not just about performance—it’s about how that performance has delivered.
Private equity, private credit and private real assets have historically and consistently shown better risk-adjusted returns than their public counterparts. For example, buyout private equity has delivered an annualized return of 15%, with 11% volatility over the past 20 years. Compare that to global public equities, which returned 9% annually, with 16% volatility. That’s a significant difference in both upside and stability potential.
And it’s not just equity. Private infrastructure and private real estate have historically outperformed public infrastructure and public REITs on a risk-adjusted basis. These private assets have been less correlated with public markets, offering diversification and downside risk mitigation—which can be especially valuable in volatile environments.
So, when advisors ask, “Where do I start?”—start with the data. Show them how private markets have enhanced portfolios with historically better returns and lower volatility using the five key charts we’ve created here: Building Wealth with the Private Markets in 5 Key Charts | Ares Wealth Management Solutions. It’s a compelling story, and one that’s backed by decades of performance.
