Erste Asset Management expands investments in private markets

• Launch of “Erste Private Markets Evergreen ELTIF” fund
• Investments in privately held companies are now available to retail investors with lower minimum investment thresholds, thanks to an innovative fund structure
• Strategic alliance with the Swiss firm Partners Group
• ·Core allocation for private markets: global investments in private equity, private infrastructure, private credit, and royalties
• Please note: investing in private markets involves both risks and opportunities. There is no guarantee of a positive return on investment

With the launch of the “Erste Private Markets Evergreen ELTIF” fund, Erste Asset Management (Erste AM) is expanding its range of private markets products and will, in the future, also give retail investors access to an investment universe that has hitherto been predominantly institutional. The fund is being launched as part of a strategic alliance with the Swiss firm Partners Group and is designed as a globally diversified solution.

Private markets have been growing in importance for years. A significant proportion of economic value creation now takes place outside the equity markets: for example, about 93% of all companies in Europe with a turnover of more than USD 100mn are unlisted and therefore difficult for many investors to access. At the same time, the importance of these markets is growing steadily – partly because companies are going public later, if at all, and a large proportion of corporate growth is already taking place in the private sector. The volume raised globally in private markets amounted to USD 840bn in 2024, compared to a global equity issue volume of USD 505bn.

“Private markets have played a central role in our long-term strategy for years. With the new Evergreen ELTIF fund, we are creating a further point of access to this asset class and are, for the first time, enabling retail investors to gain a more broadly diversified exposure to global private market investments,” emphasises Thomas Kraus, Member of the Executive Board at Erste Asset Management.

Broadly diversified private market investments as portfolio component

The Erste Private Markets Evergreen ELTIF fund serves as a strategic core allocation for private markets and focuses on broad diversification across multiple asset classes. The main focus is on private equity, accounting for about 70%, complemented by infrastructure investments, private credit, and royalties. A liquidity component is designed to facilitate regular entries and exits within a defined framework. Geographically, the target allocation is global in scope, with a focus on Europe and North America.

Numerous studies and market data illustrate that private markets can deliver attractive rates of return over long periods and can help stabilise portfolios, particularly during weaker phases in the equity markets. “Particularly in an environment of heightened market uncertainty, private market investments can make an important contribution to stabilising a portfolio. The combination of various private market strategies creates a broadly diversified component that supports long-term investors,” says Thomas Bobek, Head of Private Markets Funds at Erste Asset Management.

Long-term investment horizon and limited liquidity

Investments in private markets differ fundamentally from investments in listed companies. The fund is designed for a long-term investment horizon. Entry and exit are generally possible but are subject to certain restrictions and may be limited, particularly during periods of market stress.

The structure offers advantages such as ongoing capital investment, broader diversification across market cycles, and lower barriers to entry compared to traditional closed-end funds. At the same time, limited liquidity remains a key feature of this asset class.

Growth potential for retail investors

While institutional investors already allocate a significant proportion of their assets to private markets, this proportion remains low among retail investors:  currently, the average allocation stands at less than 3%, whereas institutional investors typically invest 10–20%. At the same time, retail investors hold a substantial share of global wealth. The opening-up of this asset class therefore represents an important structural development.

Alliance with internationally experienced private markets specialists

The Erste Private Markets Evergreen ELTIF fund is being launched in alliance with Partners Group, a leading global private markets firm with approximately USD 185bn in assets under management and more than 2,000 employees worldwide. The company has decades of experience in structuring evergreen strategies and is one of the established providers in the ELTIF fund sector. Through this alliance, Erste AM combines its strong regional presence in Central and Eastern Europe with Partners Group’s global investment expertise.

Markus Pimpl, Managing Director at Partners Group, adds: “Private markets make it possible to actively develop companies over many years and create value independently of short-term equity market fluctuations. It is precisely this long-term perspective and active management that are key reasons why private equity has often been able to achieve attractive returns over extended periods.”

Please note: investing in private markets involves risks as well as opportunities.