Scaling Private Markets in Discretionary Portfolios

PREPARED BY James Singleton

Unlocking the full potential of private markets through technology, structuring, and end-to-end support— designed to fit seamlessly into the workflows of discretionary wealth management

Private Markets have seen significant growth within private wealth portfolios, for a multitude of reasons. An increasing number of investors seeking exposure to alternative assets, a broader trend of widening access to private markets, and asset managers themselves creating wealth-specific products.

Whilst adoption across advisory portfolios has grown steadily, discretionary portfolios remain largely untapped—despite representing a significant portion of the UK and European wealth management landscape.

This white paper explores the barriers to private market penetration in discretionary mandates and examines how regulatory clarity, operational scalability, technological innovation, and growing expertise are creating a compelling pathway forward.

Private markets: From niche to necessity

Private Markets are no longer considered a niche or peripheral strategy. They have become an essential component of long-term wealth management portfolios.

The rationale is clear. Private markets offer access to return opportunities that are hard to replicate in public markets, thanks to the illiquidity premium. They also bring meaningful diversification, with distinct risk and return characteristics that help balance traditional portfolios. In a world where volatility and macro uncertainty continue to challenge traditional asset classes, the case for private markets has only strengthened.

Over the past decade, global private capital assets under management have more than doubled, driven not only by institutional allocations but also by growing interest from private wealth investors. Asset managers have responded by developing wealth-friendly products, including evergreen vehicles and semi-liquid structures, which reduce traditional barriers to entry.

The discretionary landscape in the UK

In Europe, discretionary is the biggest part of the private wealth industry and these are large pools of capital which are underserved within private markets.

Discretionary portfolio management is a cornerstone of the UK wealth industry, making up nearly 80% of the market. It reflects the strong trust clients place in professional managers to make investment decisions on their behalf, ensuring portfolios stay aligned with their risk profile and long-term goals. In this fiduciary setup, that responsibility comes with a need for careful judgement.

There’s little debate around the value of including long-term private assets in these portfolios to capture the illiquidity premium. The ‘why’ is well understood— it’s now a question of how to make it work in practice.

Despite this discretion and the well-understood value of private markets, actual adoption within discretionary portfolios remains limited. Aside from listed investment trusts, which often serve as a proxy for private markets, true exposure to private equity, private credit, real assets and venture capital remains the exception rather than the rule.

The level of expertise at wealth firms is vital for the next piece of the puzzle for private markets which is the what.

Many firms within the UK do have some level of expertise, particularly when it comes to their centralised investment functions.

There have been hires from private banks into CIO roles, in addition to firms bolstering their private markets or alternatives teams.

Moreover, there are a number of investment consultants with deep expertise in private markets (Mercer, bfinance, Redington, Cambridge Associates etc.), who themselves are focusing on how they can support wealth firms from an asset allocation, strategy, and product choice perspective.

Whilst more broadly throughout the wealth industry - particularly in the UK - there is room for improvement and increasing this expertise, the what is being addressed.

The wealth management industry widely accepts the strategic case for private markets, and as discussed is increasing its knowledge of them. What remains unresolved is the operational challenge of integration. The question facing firms is not "Why private markets?" but rather "How can we implement them at scale, across diverse client portfolios, within the regulatory and operational framework of a discretionary business?"

Barriers to penetration

The core barriers to integrating private markets into discretionary portfolios are complex and multifaceted. One of the primary obstacles is regulatory and compliance risk. Although discretionary managers are not constrained by retail eligibility rules in the same way as advised clients, they must still meet rigorous suitability requirements. Each investment must align with the client’s objectives, time horizon and risk appetite. Without the right technology to segment clients, assess appropriateness, and apply these assessments consistently, wealth managers often default to caution.

Beyond compliance, there is a significant operational challenge. Private markets are administratively complex. Closed-ended funds involve capital calls, irregular distributions, long lock-up periods and dense subscription documents. Even semi-liquid funds, which aim to address some of these frictions, introduce their own set of complexities such as hard and soft lock-ups, liquidity gates, redemption penalties and limited dealing windows. These features are difficult to manage within portfolios and often fall outside the capability of legacy systems.

Another key issue is the limitations of current technology platforms. Most are built for daily-dealing public funds and lack the flexibility to accommodate illiquid investments. Even existing platforms which support private markets struggle to track individual client positions accurately, particularly where different share classes, lock-ups or liquidity terms apply - predominantly being built as dealing desk solutions. Integration with reporting systems and performance analytics is also limited, further complicating adoption.

Internal expertise also plays a role. While many firms have invested in alternatives teams or recruited talent with private markets backgrounds, confidence in selecting and managing private market investments across a broad client base is still developing. In some cases, centralised investment functions are prepared, but the infrastructure and governance processes to scale these allocations are not yet in place.

Recent innovation in fund structures has played a critical role in bringing private markets closer to the discretionary opportunity. Evergreen ‘semi-liquid’ funds are designed to combine the return characteristics of traditional private markets with a level of liquidity that better aligns with wealth management clients.

They typically offer monthly subscriptions and quarterly redemptions, hold a buffer of liquid assets to meet these potential redemptions, and do not require capital calls.

A recent Mercer report highlighted the significant advantages these funds offer. They allow for faster capital deployment compared to closed-ended vehicles, enabling wealth managers to reduce opportunity costs. They support better asset allocation management by reducing the risk of allocation drift and enabling ongoing rebalancing. Operationally, they simplify the investment process through single-entry subscriptions, reducing the need for repeated due diligence and capital call tracking.

However, these benefits come with trade-offs. The liquidity buffer may constrain overall fund returns, and redemption limitations still apply in times of market stress. Advisors must understand the risks associated with liquidity mismatches and use pacing models and risk overlays to manage expectations appropriately.

What’s needed?

For discretionary portfolio managers to fully unlock the value of private markets, significant changes to technology infrastructure are needed. The first is scalable compliance and suitability assessments. Firms need tools that can segment clients effectively, monitor suitability dynamically, and apply guardrails at the individual level to prevent misallocation. Without this, compliance and risk teams will remain a barrier to adoption.

Secondly, operational complexity must be removed. This includes streamlining subscriptions, automating capital call and distribution tracking, enabling accurate position management, and integrating these processes into existing workflows. Only when private market funds behave operationally like mutual funds can they be adopted into model portfolios at scale.

Thirdly, firms need robust access to institutional-quality investment opportunities. Curated manager selection, due diligence support and diversification across vintages, strategies and geographies must be available in a format that aligns with discretionary mandates. Wealth managers need confidence in the products they are recommending and the tools to defend those decisions.

Finally, internal buy-in is essential. Firms must elevate private markets within their investment governance frameworks, provide training and education, and embed alternatives into the asset allocation conversation. Without leadership and commitment, implementation will remain piecemeal.

Titanbay: making private markets work at scale

Titanbay partners with leading UK wealth managers to solve the real-world challenges of bringing private markets into individual client portfolios—whether advisory or discretionary. Our platform is purpose-built to remove operational friction, simplify compliance, and fit seamlessly into existing systems.

We handle the complexity behind the scenes so wealth managers don’t have to. From client-level tracking and suitability guardrails to soft locks and redemption restrictions, our technology ensures private markets fit cleanly into portfolio models and reporting flows.

We support a wide range of structures—RAIFs, SICAVs, ICAVs, LTAFs, evergreen vehicles—tailored to the needs of each firm and client base. And we go beyond the platform: Titanbay manages subscriptions, capital calls, NAV updates, liquidity, and investor communications. We lift the operational burden, so our clients can focus on investment strategy and client relationships.

Our structuring capabilities are best-in-class, with options that align to each firm’s regulatory and operational set-up. Whether through a Luxembourg RAIF, UK LTAF or UCI-compliant evergreen fund, we offer the flexibility wealth managers need. And uniquely, thanks to our internal AIFM, we can delegate investment management back to our clients—giving them control, without the complexity.

The future of discretionary portfolios starts here

Private markets have reached an inflection point. The strategic case is clear, the demand is growing, and the tools to deliver are finally available. What was once seen as too complex, too manual, or too niche is now within reach—and discretionary managers who act now will gain a meaningful edge.

With Titanbay as a partner, private markets can be integrated seamlessly, efficiently, and at scale. The opportunity is no longer theoretical. It’s actionable. And it’s here.

Thank You

For more information on how Titanbay can support your firm’s private markets strategy, contact james.singleton@titanbay.com

📄 Download the full whitepaper: Scaling Private Markets in Discretionary Portfolios

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“The Investment Association Response to FCA consultation (CP24/8) on extending the Sustainability Disclosure Requirements (SDR) regime to Portfolio Management,” The Investment Association, Accessed March 20, 2025 at https://www.theia.org/sites/default/files/2024-06 /Final%20- %20IA%20response%20 %20FCA%20CP%20on%20extending%20SDR%20to%20PMS.pdf

“Top considerations for financial intermediaries,” Mercer, Accessed March 17, 2025, at https://www.mercer.com/assets/uk/en_gb/sharedassets/global/attachments/pdf-top-considerations-for-financial-intermediaries-2025.pdf.

Footnotes & Importaant Disclosures

This material has been prepared by Titanbay Ltd and its affiliates (together, “Titanbay”) for informational purposes only, for sophisticated and eligible investors only. It is not and may not be relied on in any manner as legal, tax or investment advice, any recommendation or opinion regarding the appropriateness or suitability of any investment strategy, or as an offer to sell or a solicitation of an offer to buy any financial instrument. Titanbay does not provide investment advice or make recommendations. All information and any statements presented herein are considered to be accurate at the time of production unless otherwise stated and have been prepared from sources we believe to be reliable. No representation or warranty or guarantee, expressed or implied, is given as to the truth, accuracy or completeness of the information or opinions contained herein. No reliance may be placed for any purposes on the information or opinions contained in this communication and material aspects of descriptions contained in the communication and supporting materials are subject to change without notice. Non-affiliated entities mentioned are for informational purposes only and should not be construed as an endorsement by or sponsorship of Titanbay. Any forecasts, figures, investment techniques and strategies set out are for information purposes only, based on certain assumptions and current market conditions and are subject to change without prior notice. Any views, opinions and estimates expressed herein constitute personal judgments of the presenters, are based on current market conditions and are subject to change without notice. This communication in no way constitutes Titanbay research and should not be treated as such. Investment in private placements, and private equity via feeder funds in particular are complex, highly illiquid, and speculative in nature and involve a high degree of risk. The value of an investment may go down as well as up, and investors may not get back their money originally invested. Investors who cannot afford to lose their entire investment should not invest. Past performance is not indicative of future performance. There can be no assurance that any current or future investments will achieve results comparable to historic results or that any investment objectives or return targets will be met. For private equity investments via feeder funds, investors will typically receive illiquid and/or restricted membership interests that may be subject to holding period requirements and/or liquidity concerns. Investments in private equity are highly illiquid and those investors who cannot hold an investment for the long term (at least 10 years) should not invest. This material is strictly confidential and may not be disclosed, reproduced, copied, distributed, or published (in whole or in part) by the recipient without the prior written consent of Titanbay unless required by law or a regulatory authority. This material is not for distribution in any jurisdiction or country where such distribution would be contrary to local law or regulation. Titanbay is not responsible for any error or omission in this material, nor do they accept liability (including in negligence) for any losses arising out of or in connection with the use of or reliance on this material. Titanbay Ltd is an appointed representative of Brooklands Fund Management Limited, which is authorised and regulated by the Financial Conduct Authority in the UK (FRN: 757575).