For too long most individual investors and their financial advisors have lacked access to private market investments. High minimum investments, asset and income threshold requirements, and operational challenges have historically limited private markets investments to institutions and very high-net-worth individuals.
Franklin Templeton created this platform to bring down barriers to private markets investments as an important source of returns for more investors. Welcome to Franklin Templeton Private Markets. Access granted.
Investors need solutions and that means delivering capabilities to financial advisors using a consultative approach and a total portfolio outcome mindset. The broad asset class coverage available through Franklin Templeton Private Markets means we have both the flexibility and expertise to follow the conversation wherever a financial advisor’s client needs lead us.
Private equity offers investors the opportunity to participate in a growing
market and to achieve higher return potential compared to public markets.
The asset class has experienced rapid growth in recent years.
The Global Private Equity and Venture Capital Market
$1.8 trillion
in 2008
$7.4 trillion
in 2022
Private credit offers investors an alternative to traditional fixed income
investing and helps minimize the interest sensitivity of their portfolios.
The asset class has experienced explosive growth since the Great Financial Crisis in 2008 and is now slightly smaller than the high yield market.
$300 billion
in 2008
$1.7 trillion
in 2023
Private real assets offers exposure to essential services and long-lived assets.
The asset class has experienced rapid growth in recent years, driven by massive capital needs for energy transition, digitlization and modernization of essential assets.
$79 trillion
expected investment at current trends
$106 trillion
expected investment needed through 2040
Franklin Templeton continues to expand our private market investment capabilities and build innovative products through the acquisition and utilization of independent investment managers, each of whom has deep expertise in a specific asset class and long term experience managing assets for some of the largest institutions in the world.
Learn more about the managers within our three major private markets investment capabilities.
Founded
1982Acquired by FT
2021Clarion Partners is one of the largest pure-play real estate investment managers offering a broad range of real estate strategies across the risk-return spectrum.
“Real estate is all Clarion Partners does, and all it has ever done. This singular focus has enabled Clarion Partners to build one of the most tenured, knowledgeable and passionate teams in the business.”
Founded
1994Acquired by FT
2022Lexington Partners is a leading global private markets investment manager of secondary private equity and co-investment funds.
“Lexington helped pioneer the development of the institutional secondary market and has built a global platform to provide liquidity- solutions to an illiquid asset class. Our team is among the most experienced in the secondary market today having completed more than 600 secondary transactions.”
Lexington Partners
Founded
2008Acquired by FT
2019A private markets credit pioneer that seeks to deliver attractive returns through its relationships, specialist expertise and global reach.
“Benefit Street Partners is a global alternative credit manager. We have a deep history in credit and run multiple investment strategies spanning private and public markets. We aim to capitalize on our information and sourcing advantage to identify the best relative value in the market and create alpha for our investors.”
Private market investments have attractive features as standalone investments, but the real potential power of private marketts can be best understood in a total portfolio perspective. Below the performance and volatility reducing benefits are demonstrated by starting with a hypothetical 60/40 portfolio, then adding a mix of private markets investments for different desired outcomes.
Risk and Return
12/31/2005—12/31/2024
10.0%
Annualized
Standard
Deviation1
7.9%
Average Annual
Total Return
325.8%
Cumulative
return2
Risk and Return
12/31/2005—12/31/2024
10.9%
Annualized
Standard
Deviation1
8.8%
Average Annual
Total Return
395.1%
Cumulative
return2
NOTE: Hypothetical 18-year portfolio return with and without private markets investments as of 12/31/2024. For illustrative purposes only. Hypothetical portfolio results shown do not represent the performance of an actual investment. Stocks, bonds, private equity, private credit, private real estate, and hedge funds are respectively represented by the S&P 500 Index, Bloomberg U.S. Aggregate Bond Index, United States, MSCI US Private Equity Closed-End Fund Index, Cliffwater Direct Lending Index, NFI-ODCE Index, HFRX Equity Hedge USD Index, HFRX Global Hedge Fund USD Index, HFRX Macro/CTA USD Index. Please note that an investor cannot invest directly in an index. Unmanaged index returns do not reflect any fees, expenses or sales charges. Diversification does not assure a profit or protect against market loss. All investments involve risk, including loss of principal. Past performance is no guarantee of future results.
Innovative strategies from independent investment managers, are available in vehicles such as separately managed accounts, U.S. 40 Act mutual funds, interval funds and tender-offer funds.
Private markets have historically delivered an “illiquidity premium” which has been captured by many institutions and family offices in their asset allocation to private markets. Learn more about the illiquidity premium and get some ideas about allocating to private markets.
Product evolution has brought more flexibility for advisors and investors to gain exposure to private markets. Franklin Templeton Institute explores the potential risks and rewards.
CRE debt’s historical performance, risk-adjusted returns, correlation to traditional investments, and its resilience during market downturns make it a potentially attractive option as a portfolio diversifier.
Private markets are investments in assets not traded on public stock exchanges. These include private equity (ownership stakes in private companies), private credit (loans to private companies), and private real assets like real estate and infrastructure. Unlike publicly traded stocks and bonds, private market investments typically require longer holding periods but may offer the potential for higher returns.
Public market investments like stocks and bonds can be bought and sold daily on exchanges with transparent pricing. Private market investments are not publicly traded, typically require holding for several years, and may involve higher investment minimums. The trade-off for less liquidity is the potential for enhanced returns over time.
Private markets can enhance a traditional stock and bond portfolio by providing diversification, potential for higher returns, and access to unique investment opportunities. These investments have had low correlation to public markets3, which can help reduce overall portfolio volatility. Adding a meaningful allocation to private markets may improve long-term portfolio outcomes.
We offer three main types of private market investments: Private Equity, which include, secondary private equity, co-investment, and select commitments to new private equity funds, Private Credit, which include direct lending, asset-backed finance, and real estate debt, and Private Real Assets, which include commercial real estate and infrastructure investments. These strategies are available through various fund structures designed to meet different investment and liquidity preferences.
The primary risk is limited liquidity—your money is typically locked up for long periods (7-10+ years) with limited to no ability to sell. Private investments also involve valuation uncertainty since they're not priced daily like public stocks, and there's limited public information available about the companies and assets. Additionally, these investments carry business and market risks that could result in loss of principal.
Many institutional investors allocate 10% to 30% of their portfolios to private markets, though the right amount depends on your personal circumstances. Your allocation should consider your investment timeline, liquidity needs, risk tolerance, and overall financial situation. It's often wise to start with a smaller allocation and gradually increase over time as you become more comfortable.
With Franklin Templeton, individual investors can now access private markets through several fund structures including interval funds (with periodic redemption opportunities), tender-offer funds, and private placement REITs. These modernized investment vehicles offer lower minimum investment requirements than traditional private market funds and are available through financial advisors. The minimum investment and specific terms vary by fund.
Traditional private market funds charge both a management fee (typically 1.5-2% annually) and a performance fee (often 15-20% of profits above a certain threshold). Modern interval and tender-offer funds typically have simplified fee structures with all-in annual expenses ranging from 2-3.5%, though some funds may also include a performance fee structure similar to drawdown funds. It's important to review each fund's prospectus to understand the complete fee structure.
Investors should evaluate the investment manager's track record and experience, the fund's investment strategy and how it fits their goals, and the specific terms including fees and liquidity provisions. It's also important to understand the risks involved and ensure the investment timeline matches your needs. Working with a knowledgeable financial advisor can help navigate these considerations.
Private markets are benefiting from several major trends including increased access for individual investors through new fund structures, explosive growth in private credit as traditional banks pull back, and massive infrastructure investment needs for energy transition and technology. Private equity continues expanding with new strategies that offer liquidity through the secondary market, while real estate is evolving to meet changing workplace and living patterns. These structural shifts are creating diverse opportunities across the private markets landscape.
Private debt funds typically invest in non-listed debt issues, including bonds, notes, and loans issued by private companies. Private debt has the potential to provide greater returns, control and reduced liquidity, than public markets.
Alternative Credit invests in below-investment-grade fixed income sectors that are relatively illiquid. Alternative credit may not be available to investors for direct investment as individuals but can be accessed through professionally managed traditional mutual funds.
Unconstrained strategies trades securities with few restrictions on when and how they buy and sell. Many unconstrained strategies do set a formal or informal a target for volatility that provides a limitation on the level of risks incurred.
Hedge strategies (also referred to as alternative strategies) use both long and short positions in markets. Some of the most common strategies are long and short equity, global macro, relative value, and credit. Hedge strategies appeal to investors who are looking to diversify their investment, in an attempt to minimize market beta returns while seeking alpha and risk-adjusted returns.
Real assets typically invest in tangible assets that derive value from their substance and physical presence. These include real estate, public and private infrastructure, natural resources, precious metals and commodities.
1. Annualized standard deviation: A measure of the degree to which an investment’s or index’s return varies from the average of its previous returns. The larger the standard deviation, the greater likelihood (and risk) that the performance will fluctuate from the average return.
2. Cumulative return: Cumulative return shows the change in the investment’s or index’s value over the time period indicated.
3. As of September 30, 2025 Sources: MSCI Indexes, Bloomberg, ICE BofA Indices, Morningstar, PitchBook LCD, MSCI Private Capital Solutions, Cliffwater, NCREIF, Preqin, Giliberto-Levy, PitchBook, Macrobond, Analysis by Franklin Templeton Institute. Notes: Quarterly data analysis from Q4 2015 to Q3 2025 based on USD total returns. Indexes used: Equities: MSCI AC World Index, Aggregate Bonds: Bloomberg Global Aggregate Index (Total Return), High Yield Bonds: ICE BofA US High Yield Index, Leveraged Loans: Morningstar US Leveraged Loan Total Return USD Index, Private Equity: MSCI Private Capital Solutions' fund search results for US Private Equity funds (all categories), Direct Lending: Cliffwater Direct Lending Index, Private Real Estate Equity: NCREIF Fund Index Open End Diversified Core (ODCE) Total Index, Private Real Estate Debt: Giliberto-Levy High-Yield Real Estate Debt Index, Private Distressed Debt: PitchBook's search results for US Distressed Debt, Asset-Based Finance: Preqin's search results for Asset-Backed Lending Strategies under the Hedge Funds category. Indexes are unmanaged and one cannot directly invest in them. They do not include fees, expenses or sales charges. Past performance is not an indicator or a guarantee of future results. Important data provider notices and terms available at www.franklintempletondatasources.com.
Important Information
This material is intended to be of general interest only and should not be construed as individual investment advice or a recommendation or solicitation to buy, sell or hold any security or to adopt any investment strategy. It does not constitute legal or tax advice. The views expressed are those of the investment manager and the comments, opinions and analyses may change without notice. The information provided in this material is not intended as a complete analysis of every material fact regarding any country, region or market.
Data from third party sources may have been used in the preparation of this material and Franklin Templeton (“FT”) has not independently verified, validated or audited such data. FT accepts no liability whatsoever for any loss arising from use of this information and reliance upon the comments, opinions and analyses in the material is at the sole discretion of the user.
“Cliffwater,” “Cliffwater Direct Lending Index,” and “CDLI” are trademarks of Cliffwater LLC. The Cliffwater Direct Lending Indexes (the “Indexes”) and all information on the performance or characteristics thereof (“Index Data”) are owned exclusively by Cliffwater LLC, and are referenced herein under license. Neither Cliffwater nor any of its affiliates sponsor or endorse, or are affiliated with or otherwise connected to, Franklin Templeton Companies LLC, or any of its products or services. All Index Data is provided for informational purposes only, on an “as available” basis, without any warranty of any kind, whether express or implied. Cliffwater and its affiliates do not accept any liability whatsoever for any errors or omissions in the Indexes or Index Data, or arising from any use of the Indexes or Index Data, and no third party may rely on any Indexes or Index Data referenced in this report. No further distribution of Index Data is permitted without the express written consent of Cliffwater. Any reference to or use of the Index or Index Data is subject to the further notices and disclaimers set forth from time to time on Cliffwater’s website.
All investments involve risks, including possible loss of principal. Investments in many alternative investment strategies are complex and speculative, entail significant risk and should not be considered a complete investment program. Depending on the product invested in, an investment in alternative strategies may provide for only limited liquidity and is suitable only for persons who can afford to lose the entire amount of their investment. An investment strategy focused primarily on privately held companies presents certain challenges and involves incremental risks as opposed to investments in public companies, such as dealing with the lack of available information about these companies as well as their general lack of liquidity. Diversification does not guarantee a profit or protect against a loss.
Risks of investing in real estate investments include but are not limited to fluctuations in lease occupancy rates and operating expenses, variations in rental schedules, which in turn may be adversely affected by local, state, national or international economic conditions. Such conditions may be impacted by the supply and demand for real estate properties, zoning laws, rent control laws, real property taxes, the availability and costs of financing, and environmental laws. Furthermore, investments in real estate are also impacted by market disruptions caused by regional concerns, political upheaval, sovereign debt crises, and uninsured losses (generally from catastrophic events such as earthquakes, floods and wars). Investments in real estate related securities, such as asset-backed or mortgage-backed securities are subject to prepayment and extension risks.
An investment in private securities (such as private equity or private credit) or vehicles which invest in them, should be viewed as illiquid and may require a long-term commitment with no certainty of return. The value of and return on such investments will vary due to, among other things, changes in market rates of interest, general economic conditions, economic conditions in particular industries, the condition of financial markets and the financial condition of the issuers of the investments. There also can be no assurance that companies will list their securities on a securities exchange, as such, the lack of an established, liquid secondary market for some investments may have an adverse effect on the market value of those investments and on an investor's ability to dispose of them at a favorable time or price.
These and other risks pertaining to specific funds, such as those involving investments in specialized industry sectors or use of complex securities, are discussed in each fund's prospectus. By clicking on the fund name, you will be taken to a more detailed fund information page which includes main investments and risks.
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