Northern Trust Asset Management (NYSE:NTRS) forecasts strong private market prospects driven by AI strength and innovation over the next decade, the firm reported in its Capital Market Assumptions (CMA) 2026 Edition on Friday.

Private markets are expected to outperform public markets, with a projected 10.2% annualized return for private equity, and venture capital – this will be driven primarily by innovation. 

Meanwhile, private credit is expected to return 8.2% annualized and may benefit from "shifting rates and tech trends, supporting AI and private firms."

"Although we expect lower rates to compress yields to some extent, we believe private credit deployment will increase in conjunction with the expected pickup in M&A activity," the report continued.

Northern Trust Asset Management global co-chief investment officer Anwiti Bahuguna said: "AI continues to demonstrate potential to transform productivity and labor markets, helping to offset the challenges of an aging workforce. ...