Market for secondaries continues to grow
Investor demand for secondaries and co-investments helped lift commitments to more than US$3.8 billion for Mercer’s latest private markets fund, pointing to shifting preferences in institutional private market allocations.
Mercer Private Investment Partners VIII, or PIP VIII, secured more than US$3.8 billion in limited partner commitments and closed in Q1 2026. The fund drew capital from wealth managers, endowments, foundations, insurers and pension funds. Mercer said many investors from earlier PIP funds made new commitments, while additional capital came from investors in the U.K., Europe and the U.S. who had not joined previous vintages.
The total was slightly below the more than US$3.9 billion Mercer raised for PIP VII, which closed in Q2 2024, according to Mercer’s earlier announcement.
Appetite shifts within alternatives
Mercer’s research shows large asset owners plan to increase allocations to private markets beyond traditional private equity, with greater interest in private debt, private credit and infrastructure.
PIP VIII recorded increased demand for secondaries and co-investment opportunities.
Bloomberg reported that Garvan McCarthy, Mercer’s global alternatives chief investment officer, said investor interest within private assets had shifted toward secondaries and co-investments rather than traditional primary deals and corporate lending. He said sourcing and execution capabilities in those areas were becoming more important for investors seeking access to private markets.
McCarthy added that geopolitical developments had contributed to a more cautious market tone, but had not changed client allocations to private assets.
PIP VIII is the eighth vintage in Mercer’s Private Investment Partners series, which is structured to provide access to private equity, private debt, infrastructure and real estate through one fund.
One structure, multiple routes
PIP VIII includes a U.S. vehicle for domestic investors and a Luxembourg vehicle for non-U.S. investors.
Fund invests across primaries, co-investments, secondaries and other specialized opportunities. The company said the structure is intended to provide diversified exposure across private market asset classes while lowering the operational demands associated with managing separate mandates.
“The growth and sophistication of private markets has added portfolio complexity and raised institutional investors’ execution burden,” said Niall O’Sullivan, Mercer’s global solutions chief investment officer.
“We designed our PIP series to provide simplified access to compelling opportunities across private asset classes and structures while helping investors maintain control over their risk profile and asset allocation – overlaid with a total portfolio risk management approach. This is critical in today’s environment, when the stealth risk associated with investment trends like AI challenges traditional assumptions about portfolio diversification,” O’Sullivan added.
Scale behind private markets execution
Mercer had nearly 300 alternatives professionals across 40 offices worldwide as of January 1, 2026, up from more than 260 professionals across 32 offices as of January 1, 2024.
"Despite a challenging fundraising and distribution environment, we’re delighted with the ongoing trust and confidence placed in our capabilities and solutions,” said Michael Lernihan, Mercer’s global commercial leader for investments. “We look forward to continuing to support clients with discerning and targeted private market opportunities and specialized investment vehicles designed to help capture this attractive source of potential long-term growth.”
Mercer is part of Marsh McLennan, which advises clients in 130 countries and reported annual revenue of $27 billion with more than 95,000 employees.
