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Morningstar Survey: Asset Owners Increase U.S. and Private Market Exposure as AI Risks Rise

MORN
  • Global asset owners increased exposure to U.S. assets & private markets while citing generative AI, inflation, & energy/supply chains as top investment concerns.
  • 31% of asset owners increased U.S. exposure last year, reversing the 2025 trend despite 51% citing Trump administration concerns & 34% citing regulatory uncertainty.
  • Rising inflation (76%), the evolving generative AI landscape (71%), & energy/supply chain crises (66%) were ranked as the three most material global investment issues.
  • ESG integration reached 43% in North America (up 6 points) while declining in Europe from 48% to 43%, with North America leading year-over-year growth.
  • Environmental factors were deemed more material by 56% of respondents, whereas governance materiality dropped to 45% with business ethics falling 24 points.
  • AI-related environmental concerns more than doubled year-over-year to 25%, alongside priorities for climate transition readiness (50%) & energy management (42%).
  • Top macro concerns regarding AI include compounding valuations & capital expenditures (73%), market concentration risk (65%), & overdependence on mega-tech providers (63%).
  • Asset owners prefer bottom-up AI approaches (38%) over top-down (20%), primarily using AI for internal efficiency rather than investment insights.
  • Private market allocation is expected to rise from 19% to 23% of AUM within five years, with Europe targeting 25% & North America 21%.
  • Primary drivers for private market growth include diversification (56%), higher expected returns (42%), & access to themes like AI electrification (29%).
  • Liquidity risks (63%), transparency issues (43%), & limited data availability (28%) continue to hinder private market investment.
  • Confidence in data providers grew to 34% for ESG data support, while confidence in regulation fell to 39% with only 4% viewing it as a major help.
  • Direct engagement as a top priority dropped to 30%, while collective engagement & public policy engagement both increased.
  • The survey included over 500 asset owners across 11 countries, representing more than $20 trillion in combined assets.