Northern Trust survey shows 86% hold private assets and 60% now prioritise liquidity
Northern Trust’s 'Asset Owners in Focus: Global Asset Owner Peer Study 2025' highlights how institutional investors are shifting portfolio strategies and operations in response to market volatility, regulation and technological shifts.
Based on a survey of 180 global asset owners with portfolios from US$1bn to over US$500bn, the report captures changes in asset allocation, risk priorities, outsourcing, and technology spending.
Private markets form 13 percent of the average portfolio, and 86 percent of asset owners surveyed report holdings in private assets. These include sectors such as commercial real estate, private credit and direct lending, and residential real estate.
Additionally, 68 percent invest in hedge funds, absolute return products and other diversifiers. Among those invested in private markets, 21 percent also hold digital assets, including cryptocurrencies.
Equities still account for 42 percent of portfolios on average, while fixed income stands at 27 percent.
Liquidity has become a greater concern, with 60 percent of respondents saying its importance has increased. Global portfolios hold an average 11 percent in cash.
Top external risks include interest rate changes, geopolitical instability, and domestic political uncertainty. Investment fees and the effects of climate change follow.
Liquidity risk is now a key concern, with 54 percent naming it among their top three investment risks.
Asset owners are focusing technology budgets on portfolio analytics tools (51 percent) and compliance and regulatory reporting (48 percent).
Half of respondents say support from service providers with technology implementation and target operating model design would be the most effective way to improve operations.
Meanwhile, 43 percent see better integration of third-party applications as the most valuable enhancement.
Among those outsourcing investment operations, the most common functions include document management and regulatory reporting (49 percent each), trade execution (45 percent), performance and analytics reporting (45 percent), and accounting for alternative investments (45 percent).
Asset owners in EMEA and APAC regions allocate less to equities and more to cash than US-based peers. Risk metrics and technology investments also differ by region.
James Wright, head of Asset Owners, EMEA at Northern Trust, said EMEA asset owners are using technology to manage both operational and investment risk and are adjusting to regulatory demands and data handling requirements.
In the Asia-Pacific region, asset owners are increasing reliance on outsourcing and technology for efficiency.
Angelo Calvitto, head of Asia-Pacific, said that many in the region are working with service providers to manage core operational tasks, especially related to alternative investments.
The survey includes responses from pension funds, OCIOs, multi-managers, family offices, sovereign wealth funds, endowments and other institutions across the Americas, EMEA and APAC.
