The PER, a first entry point
Preparing for retirement and managing wealth once retired are part of the same line of thinking: building an allocation that can evolve over time, without losing sight of the different horizons it must serve.
Since 24 October 2024, the regulation stemming from the Green Industry Act (Law No. 2023-973 of 23 October 2023) has provided, for the new PERs concerned (the French individual retirement savings plan, Plan d'Épargne Retraite) and depending on the managed-allocation profile and the time remaining before retirement, a minimum share of investments in private markets and equivalent assets. This development reflects a recognition of their potential role in long-term savings, provided the allocation is suited to each saver's risk profile and liquidity needs. The logic is sound: when the horizon extends over several decades, a portion of wealth can be invested in less liquid assets, whose value creation takes time. This direction gradually establishes the role of private assets, including private equity, in long-term savings, and acknowledges their potential contribution to financing businesses and the real economy.
But the PER is only one wrapper among others. Life insurance (assurance-vie), securities accounts and other assets are governed by different rules on availability, taxation and wealth transfer. The real question is therefore the role of private assets in the overall allocation to private markets, whichever wrapper holds them.
Before retirement: thinking in terms of flows
A listed security can be adjusted at any time. A private markets fund operates in multi-year cycles: initial commitment, gradual capital calls, value creation, distributions. The approach must therefore shift from a stock logic, made up of one-off subscriptions, to a flow logic.
Rather than concentrating investments on a single vintage, the saver can build exposure gradually by spreading commitments over time. This approach diversifies entry points, allows several generations of funds to coexist and, over time, makes it possible to reinvest part of the distributions received into new commitments. Inspired by institutional investors' practices, this dynamic management of commitments and flows nevertheless requires rigorous planning, as the timing of capital calls and distributions remains inherently uncertain. The question is therefore no longer only how much to invest, but also at what pace, over which horizons and with what projected cash flow trajectory.
As retirement approaches, the priority shifts: it is no longer only about building long-term exposure, but also about ensuring that the commitments still in the portfolio remain compatible with future liquidity needs.
In retirement: one portfolio, several horizons
Retiring does not mean the end of every long-term investment horizon. A retiree may need immediate liquidity to fund their lifestyle and capital available in the medium term to support their plans, but may also hold a portion of their wealth that they do not expect to spend for 10 or 20 years, or that they wish to pass on. It is therefore not age that sets the investment horizon, but the intended purpose of each portion of wealth. It is on this last portion that private assets, and private equity in particular, can find their place, provided liquidity needs are covered elsewhere.
Not all private assets strategies share the same characteristics. Primary private equity generally follows long value creation cycles, while certain secondary strategies can offer different deployment and capital return profiles. Private debt and infrastructure also follow their own economic logic and cash flow timelines. This diversity makes it possible to consider complementary allocations, provided the risks specific to each strategy, their liquidity and the actual duration of the investments are taken into account.
Nevertheless, distributions from private markets funds remain uncertain, both in amount and in timing. They cannot be equated with regular or guaranteed income. Building the allocation must therefore take into account liquidity constraints, the risk of capital loss and the possibility that some investments may extend beyond their originally anticipated duration. The aim is not to use private assets to meet every retirement need indiscriminately, but to give them a precise role within a diversified portfolio.
The prospect of wealth transfer can also justify maintaining long-term exposure, beyond the original holder's own horizon. This approach nevertheless requires anticipating the legal and tax arrangements for the transfer, as well as the constraints specific to private markets vehicles, notably their limited liquidity, including in evergreen funds, and any commitments still to be called. This vision calls for long-term oversight: monitoring commitments, anticipating capital calls, analysing distributions, reassessing needs and adjusting the allocation.
In conclusion
Retirement is not a single deadline at which every investment strategy should stop. It marks a change in wealth needs, which calls for a gradual adjustment of the allocation.
For wealth management professionals, the challenge is therefore to move beyond an approach based solely on product selection, and to organise commitments, anticipate flows and articulate the different strategies over time. The relevance of private assets is not measured by the investor's age, but by their ability to meet a specific wealth objective over a suitable horizon.
To go further, read our analysis of the outlook for private markets through 2031.
An allocation that evolves with life stages
| Stage | Focus | Key actions |
|---|---|---|
| Before retirement | Build | Diversify investments, spread commitments over time, prepare for the first returns of capital |
| Approaching retirement | Align | Match the investments still in the portfolio with foreseeable liquidity needs and any new commitments |
| During retirement | Preserve | Keep the flexibility needed for life projects, while maintaining long-term exposure on the portion of wealth not intended for immediate spending |
(Sources: Law No. 2023-973 of 23 October 2023 on green industry, article 35; order of 1 July 2024 amending the order of 7 August 2019 implementing the retirement savings reform, published in the Journal officiel of 5 July 2024, in force on 24 October 2024 — Hogan Lovells, Actualités législatives et réglementaires, July-August 2024; AFG, summary of the Green Industry Act. Editorial synthesis and analysis by Private Corner.)
Disclaimer: this document is for information purposes only and is intended for wealth management professionals. It is issued by Private Corner, an asset management company authorised by the AMF (GP-20000038). It does not constitute investment advice or a recommendation to subscribe. Investments in private markets assets carry risks including capital loss, illiquidity and valuation risk. Distributions are neither regular nor guaranteed. Past performance and forecasts are not indicative of future performance.
