Investment Preferences for 2026: How LPs Are Allocating Capital

Where LPs are focusing capital across geographies, sectors and asset classes in 2026.

A regional reset rooted in realism

LPs’ geographic preferences for 2026 reflect a pragmatic reassessment of risk and opportunity. While North America remains a cornerstone region for many investment portfolios, our survey data shows a noticeable cooling in enthusiasm compared with last year, driven by greater emphasis on pricing discipline, selectivity and risk-adjusted returns as competition for assets remains high.

At the same time, LPs’ interest in investing in Europe is gaining momentum. In fact, 54 percent of LPs surveyed say they plan to allocate capital to the region over the next 12 months, reflecting growing confidence after a prolonged period of macroeconomic pressure. LPs are seeing opportunities emerge across Europe, particularly where valuations remain attractive and managers are positioned to benefit from stabilization. Asia-Pacific continues to attract attention as well, though LP sentiment is more measured, shaped by uneven growth trajectories and ongoing policy considerations.

Together, these changing geographic preferences underscore a broader theme: LPs are no longer allocating on momentum alone. They are increasingly sensitive to timing, valuations and the ability of fund managers to navigate complexity.

Private markets stay central — but with nuance

Private assets remain firmly embedded in LP portfolios, yet preferences within the space are evolving. Private equity continues to dominate allocations, particularly strategies aligned with operational improvement and sector specialization.

Survey results also point to growing focus on digital assets and cryptocurrencies heading into 2026. While still approached selectively, increased interest appears tied to shifting regulatory expectations under the Trump administration and the potential for diversification. For some LPs, digital assets represent a measured opportunity. For others, they remain in the “watch-and-evaluate” category.

Private credit remains a key area of focus as well. In an environment where traditional financing channels remain constrained, LPs see private credit as a way to access attractive risk-adjusted returns while maintaining greater structural protection. Infrastructure and real assets also retain appeal, particularly where they offer inflation sensitivity and long-duration cash flows.

Impact investing is gaining traction alongside these strategies, as LPs increasingly look to align capital with measurable outcomes.

Sector preferences favor fundamentals over hype

When it comes to sectors, LPs globally are signaling a preference for sectors grounded in long-term demand rather than short-term narratives. Financial services and technology continue to feature prominently, supported by structural tailwinds such as evolving consumer behavior and digitization. Healthcare also remains high on LP agendas, driven by demographic trends and innovation pipelines that extend well beyond economic cycles.

Beyond these core sectors, LP interest is extending selectively into areas tied to long-duration themes. Renewables and energy transition–related investments are attracting attention. Infrastructure similarly retains appeal as a defensive allocation, valued for its resilience and predictable cash flows.

Consumer-facing sectors, including consumer goods and services, are being approached more cautiously by investors, with just 12 percent of LPs indicating they want to see managers invest in these areas in 2026. Real estate also reflects a more nuanced outlook, as higher financing costs and valuation uncertainty continue to influence LP sentiment.

What’s really driving investment decisions

Beyond regions and sectors, what underlying factors are shaping portfolio decisions in 2026? For starters, LPs are increasingly attentive to diversification benefits and portfolio construction. Risk-adjusted returns remain paramount as well, with investments expected to strengthen existing exposures — not simply add headline returns.

LPs are also weighing long-term growth potential more carefully, favoring strategies they believe can generate durable value across market cycles. At the same time, alignment with sustainability considerations is becoming a more consistent part of investment evaluation, as LPs look to ensure capital is deployed in ways that support responsible practices alongside financial performance.

Macroeconomic uncertainty continues to influence decision-making, yet it is no longer paralyzing. Instead, LPs appear more comfortable operating in an uncertain environment, provided managers demonstrate transparency and transparent about risk.

The signal for managers

For general partners (GPs), the message from LPs is both encouraging and exacting. Capital is available, but it is increasingly selective. LPs want managers who understand their markets deeply, can articulate why their strategy works now and have the operational infrastructure to execute consistently.

In 2026, winning allocations will depend less on broad promises and more on strategy, geography and sector focus. That also means having the right tools in place to support transparency, reporting and efficient collaboration, whether through established platforms like Intralinks’ FundCentre or other purpose-built solutions. LPs are not looking for novelty; they are looking for confidence.

As investment preferences continue to evolve, LPs are increasingly guided by informed decision-making. Managers that align with that mindset will be best positioned to capture attention — and capital — in the year ahead.

For more insights into LP investment priorities in 2026, read the full 2026 SS&C Intralinks LP Survey.