Limited partners remain committed to private markets but face mounting liquidity constraints as slow distributions weigh on capital deployment, even as investors see opportunities in infrastructure and secondaries, according to a survey by Goldman Sachs Alternatives.
About 84% of limited partners (LPs) plan to maintain or increase their capital deployment over the next 12 months, broadly in line with 83% in 2025, according to Goldman Sachs Alternatives’ 2026 Global Alternatives Survey: The LP View, which polled 225 LPs and institutional investors between June and August.
Of those surveyed, 37% expect to deploy more capital than last year, down from 43% in 2025, while 47% plan to maintain their pace. Only 11% expect to cut deployment, compared with 14% a year earlier.
The lack of distributions remains the biggest constraint on investment activity, cited by 35% of LPs, up from 31% in 2025. Changes to allocation targets ranked second, at 29%, highlighting the pressure on investors to manage commitments amid slower exits and capital returns.
LPs remain more likely to be under-allocated than over-allocated across most private market strategies, suggesting scope for further investment as liquidity improves.
Private credit under-allocation rose to 48% in 2026 from 43% a year earlier, while the share of LPs reporting over-allocation dropped to 4% from 12%. Infrastructure under-allocation stood at 41%, down from 45% in 2025, while private equity’s fell to 33% from 35%.
Real estate sits furthest along the allocation cycle, with 18% of LPs over-allocated, although that share declined from 25% a year earlier. The proportion under-allocated to the asset class rose to 31% from 26%.
“Liquidity has become a competitive edge as time to exit has extended,” said Stephanie Rader, global co-head of alternatives capital formation at Goldman Sachs Alternatives. “LPs are increasingly using secondaries as a core tool for portfolio allocation and managing cash flows to build more resilient portfolios.”
Infrastructure, Secondaries lead
Infrastructure and secondaries are among the private market strategies attracting the strongest investor sentiment, as LPs look for opportunities and ways to manage liquidity.
About 43% of LPs reported a more favourable outlook for infrastructure than a year earlier, against 7% who were less positive. For secondaries, positive views outnumbered negative ones by nearly three to one, with 44% reporting an improved outlook and 15% a weaker one.
Co-investments also retained investor support, with only 6% of respondents reporting a less favourable outlook. Real estate sentiment improved for 37% of LPs, while 16% reported a deterioration.
Private equity sentiment was broadly unchanged, with 56% of LPs reporting no change in their outlook. Positive and negative views were relatively balanced, at 24% and 20%, respectively.
Private credit faced greater uncertainty, recording the largest year-on-year increase in negative sentiment, with 35% of LPs reporting a weaker outlook. However, 65% continued to see opportunities as unchanged or better than a year earlier.
The survey also points to a more selective approach to manager commitments, with established relationships retaining an advantage. Most LPs said a meaningful share of their commitments over the past 12 months went to existing managers.
Among LPs considering new managers, track record was the leading selection criterion, cited by 78% of respondents. Half were looking for access to new strategies or asset classes, while 39% prioritised specialist expertise and 35% sought diversification across sectors or regions.
The survey found that geopolitical tensions remained investors’ leading risk concern for a third consecutive year. Geopolitics featured among the top five risks for 82% of LPs, with 36% naming it their single biggest concern, followed by inflation at 67% and a potential US economic slowdown or recession at 63%.
Artificial intelligence is also reshaping investment priorities, with 34% of LPs identifying AI as the biggest driver of change in alternatives over the next five years, ahead of industry consolidation and economic disruption, both at 13%.
“The question is shifting from gaining AI exposure to identifying managers who can use it to improve investment decisions and create value in portfolio companies,” the report said.
Goldman Sachs said investors are increasingly focusing on managers with the ability to deliver value creation, maintain underwriting discipline and adapt to structural shifts as they pursue returns in a more selective investment environment.
