North American institutional investors are increasingly focusing private market investment closer to home as inflation, geopolitical uncertainty and energy security concerns reshape portfolio priorities, according to new research from IFM Investors.

PM700, IFM Investors’ annual survey of 700 senior investment professionals across 19 countries, found North American investors are more likely than their global peers to favor domestic private market opportunities, reflecting a growing focus on portfolio resilience and strategic investment themes.

More than two-thirds (67 percent) of North American investors prefer private market investments in the United States and Canada, while 63 percent identify inflation as one of the largest risks facing their portfolios compared with 55 percent globally.

The findings suggest investors are becoming increasingly selective about where and how they deploy capital as they balance the need for resilience with the pursuit of long-term growth opportunities.

PM700 also found many investors continue to question whether portfolios are sufficiently resilient for the current environment. Globally, only 21 percent of investors believe their portfolios are designed to perform consistently across all economic conditions, while nine percent describe their portfolios as vulnerable to economic shocks.

Energy security, infrastructure and domestic opportunity gain momentum

North American investors are showing stronger interest than global peers in sectors linked to economic and national resilience.

  • Twenty-eight percent identify conventional energy as one of the top private market opportunities, compared with 22 percent globally.

  • 25 percent identify defense as a leading opportunity compared with 21 percent globally.

  • Interest in defense rises to 32 percent among North American insurers and 34 percent among North American wealth managers.

At the same time, investors continue to see opportunities associated with the energy transition. Sixty-five percent of North American investors believe the transition will remain a long-term source of attractive private market investment opportunities.

The findings point to a broader focus from North American investors on the assets underpinning economic growth, energy security and technological transformation, creating significant opportunities across infrastructure and real assets.

Infrastructure remains the preferred private markets asset class

Infrastructure continues to be one of the strongest allocation stories globally.

  • Nearly two-thirds of investors (63 percent) plan to increase infrastructure equity allocations over the next three to five years, making it the most attractive private market asset class globally, narrowly ahead of private equity (62 percent).

  • A further 55 percent plan to increase allocations to infrastructure debt.

Investors said they were increasingly using infrastructure to gain exposure to long-term structural themes, including digitalization, artificial intelligence, electrification and energy security, while also enhancing portfolio resilience.

As demand for digital infrastructure and power generation continues to grow, investors increasingly see infrastructure as a critical link between long-term growth opportunities and portfolio resilience.

Infrastructure moves into the mainstream of North American institutional portfolios

Infrastructure is increasingly being recognized as a distinct asset class within institutional portfolios rather than simply being grouped alongside alternatives or real estate.

PM700 found infrastructure equity is now the most attractive private markets asset class globally, with 63 percent of investors planning to increase allocations over the next three to five years, narrowly ahead of private equity at 62 percent. A further 55 percent intend to increase infrastructure debt allocations, highlighting growing conviction across the broader infrastructure asset class.

In North America, this shift is being driven by a combination of inflation, energy security and domestic investment priorities. Nearly two-thirds of investors (63 percent) identify inflation as a major portfolio risk, while 67 percent prefer private market investments in the United States and Canada.

Investors increasingly see infrastructure as one of the few asset classes capable of delivering both resilience and growth. PM700 found 44 percent value infrastructure for its exposure to long-term structural themes such as digitalization and the energy transition, while 42 percent cite stable long-term cash flows and defensive portfolio characteristics.

The growth opportunity is also expanding. Sixty-five percent of North American investors continue to view the energy transition as a long-term investment opportunity, while investors are increasingly positioning portfolios around infrastructure linked to energy security, rising power demand, digitalization and artificial intelligence.

More than seven in ten investors globally (71 percent) believe exposure to long-term megatrends such as artificial intelligence, digitalization and the energy transition will be essential to achieving future return objectives. As those themes increasingly require investment in power systems, digital networks and essential infrastructure, investors are moving infrastructure from a specialist allocation towards a core component of portfolio construction.

Investors seek greater flexibility and specialist expertise

As private markets become increasingly complex, investors are placing greater importance on flexibility, implementation capability and specialist expertise.

PM700 found:

  • Thirty-nine percent of North American investors say they want more customized investment solutions, compared with 33 percent globally.

  • 44 percent of investors believe limited expertise restricts their ability to scale investments in complex thematic areas.

  • 26 percent express concerns about the depth of internal private markets expertise available within their organizations.

The findings suggest investors are increasingly looking for partners capable of providing specialist insights, implementation expertise and tailored investment solutions as they pursue more sophisticated private market strategies.

Quotes attributable to Luba Nikulina, Chief Strategy Officer, IFM Investors:

“North American investors are not retreating from private markets. What PM700 shows is that they are becoming more selective about where they take risks and they are increasingly focused on opportunities that can deliver both resilience and growth.”

“After several years of inflation, volatility and geopolitical uncertainty, investors are placing greater emphasis on portfolio durability. Increasingly, they are looking for investments that can help protect portfolios while maintaining exposure to long-term growth opportunities.”

Quotes attributable to Andrea Mody, Head of North America, Clients & Strategy, IFM Investors:

“Infrastructure has established a meaningful allocation of its own within North American institutional portfolios, with allocations increasingly approaching or reaching double digits. Investors are recognizing that many of the themes shaping the next decade, including artificial intelligence, energy security, digitalization and economic competitiveness, are fundamentally infrastructure themes.”

“As a result, infrastructure is increasingly being viewed not simply as an alternative investment, but as a strategic asset class capable of delivering both resilience and long-term growth.”

About IFM Investors

IFM Investors is a global asset manager, founded and owned by pension funds, with capabilities in infrastructure equity and debt, private equity, private credit, real estate and listed equities. Our purpose is to invest, protect and grow the long-term retirement savings of working people.

With assets under management of approximately US$201.7bn as of 30 June 2026, we serve almost 900 institutional investors worldwide, operating from 16 offices across Australia, Europe, North America and Asia.

Disclosure:

This article is provided for informational purposes only. It does not constitute an investment recommendation, offer or solicitation and should not be relied upon as investment advice or as the basis for any contract or commitment. This information does not constitute investment, legal, accounting, regulatory, taxation or other advice. IFM Investors Pty Ltd (“IFM Investors”) recommends that before making an investment decision, each prospective investor should consult a financial advisor and should consider whether any investments are appropriate considering their particular investment needs, objectives, and financial circumstances. Tax treatment depends on each prospective investor’s individual circumstances and may be subject to change in the future. This information should not be reproduced without the written consent of IFM Investors.

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