Global Pension Fund PE Allocations 2025

Pension funds and sovereign wealth funds are the cornerstone allocators to private equity. Their long-duration liabilities and tolerance for illiquidity make them natural partners for PE managers, and their allocation decisions shape the flow of hundreds of billions of dollars into alternative investments each year.

This report tracks 30 of the world's largest institutional investors, with combined assets under management of approximately $10768 billion. On average, these funds allocate 10.6% of their portfolios to private equity, representing approximately $1019 billion in aggregate PE capital.

For GP stakes investors, pension fund allocation trends are a leading indicator of fundraising conditions. When large allocators increase their PE targets, it signals a favorable environment for fund managers and supports the fee revenue streams that underpin GP valuations. Conversely, allocation reductions or denominator effect pressures can create headwinds for fundraising and, by extension, for GP stakes pricing.

The data also reveals meaningful regional differences in allocation philosophy. North American pension funds tend to have higher PE allocations than their European counterparts, while Asian sovereign wealth funds are rapidly expanding their alternatives exposure from a lower base. These regional dynamics create differentiated fundraising environments for managers with global versus regionally focused strategies.