A resource from Schroders for faith-based investors seeking to learn more about private markets

In our upcoming FCI Forum on September 4, Faith-Consistent Investing (FCI) and the Journey into Impact, we’ll discuss how to overcome common barriers to broader adoption of FCI. These barriers – frequently based in misperceptions – can occur in relation to all sorts of FCI, but many faith organisations face even greater resistance when considering a move into impact investments using private market securities.

Becoming better informed on the mechanics of private market investment opportunities can provide valuable perspective when considering impact investing, and Schroders Capital offers a wealth of information on its private markets knowledge hub.

Schroders Capital is the private markets investment division of the broader Schroders plc group, managing $111B in assets under management (as of June 30, 2025) across private equity, private debt and credit alternatives, real estate, and infrastructure, and the private markets knowledge hub consists of overviews and more detailed descriptions of each of these areas.

For smaller faith-based asset owners seeking to pursue FCI, private markets may seem daunting, or better suited for larger institutions, but this need not be the case. As Portfolio Director Nathalie Krekis writes in the knowledge hub piece Private assets: routes in for investors: ‘Much has been written about the democratisation of private assets; the catch-all term for a range of changes expanding private market access beyond its traditional, institutional client base.’

She goes on to describe the central importance of the portfolio allocation process – which investors should always carefully consider – and notes that ‘an allocation to private assets, as part of a multi-asset strategy, can bring improved risk return dynamics to a portfolio,’ based on three key reasons:

1. The opportunity set – investing in private markets enables clients to access an opportunity set that is not available in public markets. Evidence also shows that companies are staying private for longer or indeed not choosing to list at all. By not allocating to this asset class there is a huge investable universe that investors are missing out.

2. Enhanced returns – there is strong historic evidence to show that private markets have generated premium returns to public markets on a net of fees basis. This is driven by the illiquidity and complexity premiums found in the asset class. While past performance is no guide to future returns, we believe the depth of the market and manager skill will continue to drive this trend looking forward.

3. Diversification benefits – Data suggests that an allocation to private assets improves diversification across risk profiles. Private asset valuations are only updated infrequently and are not often “marked to market”, that is, priced to reflect movements in public markets.

The use of private markets for impact investing can offer a degree of intentionality that may be both appropriate and appealing for FBAOs who have discerned their priorities based on their beliefs, teaching and values; and articulated them in their Investment Policy and Guidelines (IP&G) Statements!

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