Institutional investors most frequently picked out private equity as their best chance for returns in 2026 amid uncertainty over how geopolitical events will impact global economies.
About half of investors picked PE as an asset class it expected to deliver the best absolute or total returns over the next 12 months, asset manager Commonfund said, citing a survey of more than 200 institutional investors at its annual Forum event.
Public equities (40%) and venture capital (34%) also scored well, with 27% selecting real assets and 16% private credit.
Expectations for private markets over the next 12–18 months are largely stable, the survey suggested, with 34% of investors expecting returns to be about the same as the previous 12–18 months, 31% expecting stronger returns and 30% expecting weaker returns.
Regarding investor concerns, the majority cited geopolitical events (52%) as the top issue facing the economy and markets in 2026. Rising inflation (17%) and the potential for recession (10%) followed, underscoring ongoing macroeconomic uncertainty.
When asked about expectations for US stock market returns in 2026 compared to the 10-year average annualized return of 13% (as of February 2026) for the S&P 500 Index, nearly half of investors said they expected lower returns, while 35% anticipate returns will be about the same. Just 14% expect higher returns, and 2% foresee negative returns.
Mark Anson, CEO and CIO of Commonfund, said, “We are cognizant of the current geopolitical circumstances that might allow for a more cautious near-term outlook.
“However, long-term investors remain largely confident in their ability to achieve target returns, supported by diversified portfolios, allocations to alternative asset classes, and the identification of non-correlated alpha streams.
“We expect private equity and public equities to continue playing a meaningful role in helping institutions pursue their long-term objectives in the years ahead.”
Commonfund said that when assessing their own organizations’ ability to meet long-term targets, the majority of investors remain constructive.
Nearly 59% of those surveyed said they were ‘modestly bullish’ about achieving target returns over the next 10 years, and 17% said they were ‘very bullish’, with another 17% reporting they were starting to feel nervous about their ability to meet those goals – with 1% feeling ‘very nervous’.
Anson said, “While today’s environment is undeniably complex, the results reinforce that institutional investors are approaching 2026 with discipline, realism and a long-term perspective.
“At Commonfund, we understand that uncertainty is part of the landscape and are positioning portfolios thoughtfully to navigate this complexity while staying focused on strategic objectives.”
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