Coller Capital’s latest Global Private Capital Barometer found that 88% of limited partners – institutions such as pension funds buying into private markets wouldn’t increase allocations to their existing manager relationships next year.

The report said this trend had been building over the past year, with almost 80% of respondents saying they had already declined re-investment opportunities in 2024.

Some investors (29%) said they had decided not to re-invest due to a lack of liquidity, while 16% said they had changed investment strategy. The majority – 42% – cited performance issues.

A separate report from consultancy group McKinsey, published in March, found that the difference between the best performing 25% and worst performing 25% of private equity funds was more than 15 percentage points, emphasising the importance of a strong strategy and optimal fund selection.

Liquidity issues were also clear in other data from the Coller Capital report: 90% of respondents had reported requests from their managers for extensions to fundraising timelines, while 61% said they had seen funds closing below target.

The report surveyed 107 private markets investors from around the world, collectively responsible for $1.9trn (£1.5trn) in assets.

Almost two-thirds (64%) of respondents said private markets managers – also known as general partners – could provide more transparency around when they would call on committed capital and when investors could expect distributions from their investments.

Only 32% said they felt current exit timelines for portfolio investments were realistic, and 63% felt these were optimistic.

Jeremy Coller, chief investment officer and managing partner at Coller Capital, said a fall in merger and acquisition activity had also contributed to a fall in investor interest.

However, he also highlighted an overall strong appetite for private markets, with private credit in particular proving popular. More than a third (37%) said they expected to increase allocations to private debt and credit over the next 12 months.

Similar proportions said they would increase investment in private equity (34%) and infrastructure (33%).

The data reflects similar findings from private markets analytics firm Preqin. In October, Preqin reported that fundraising across private markets had fallen since a peak 2021.

Infrastructure managers reported an increase in fundraising totals, but private debt and private equity managers said they had received less than the previous two years – and did not expect an upswing until 2026 or 2027.