The Accredited Investor's Guide to Private Equity Diversification in 2026

If you've been investing in private equity for a while, you've probably noticed something: the playbook is changing. The days of concentrating your PE allocation in North American buyouts and calling it diversified are behind us. 2026 is shaping up to be a year where smart diversification isn't just a nice-to-have, it's the difference between mediocre returns and meaningful alpha.

Here's the good news: 92% of limited partners plan to maintain or increase their PE allocations this year. The appetite is there. But the strategy? That's where things get interesting.

Let's break down what diversification actually looks like for accredited investors right now.

The Geographic Shift You Can't Ignore

For the first time in recent memory, the UK and Europe have overtaken North America as the most attractive regions for private equity investment. Yes, you read that right.

Why the shift? A few factors are at play:

• Better entry multiples. European leveraged buyouts consistently trade at lower multiples than their US counterparts. That means more value on the way in.

• Less competition. The North American market is saturated. Everyone's fishing in the same pond. Europe offers a less crowded deal environment.

• Strong middle-market opportunities. We're seeing established companies with solid track records in industrials, healthcare, and sustainable technology across Europe.

Add in some policy shifts domestically, and you've got a compelling case for looking across the Atlantic. This doesn't mean abandoning US exposure: it means balancing it with opportunities where the risk-reward equation looks more favorable.

Strategy Diversification: Beyond Traditional Buyouts

Here's where it gets tactical. Current allocations among private wealth professionals show a surprisingly even spread across strategies:

Strategy	Allocation
Private Equity	19%
Private Real Estate	18%
Private Credit	16%
Venture Capital & Growth	16%
Private Infrastructure	15%

Notice anything? No single strategy dominates. That's intentional. Let's dig into the strategies gaining the most momentum.

Venture Capital & Growth

This is the hot hand right now. A full 47% of private wealth professionals plan to increase their VC and growth allocations in 2026: making it the leading strategy for the year. The AI boom has a lot to do with this, but we'll get to that in a minute.

Secondaries

The secondary market is having a moment. With traditional PE exits constrained (more on that below), LPs are seeking liquidity wherever they can find it. Secondaries let you acquire high-quality assets at favorable pricing while providing an exit pathway for sellers who need one.

Secondary transaction volumes have grown significantly, and this trend shows no signs of slowing down.

Private Credit

Traditional lenders are being cautious. That's created a gap that private credit has rushed to fill. Borrowers increasingly prioritize speed, certainty, and customization: exactly what private credit delivers.

The risk-adjusted returns here remain attractive, and the blurring lines between banks and private lenders mean this asset class is becoming essential to the broader financing ecosystem.

The AI Question: How to Play It Smart

You can't talk about 2026 investing without talking about AI. But here's the thing: concentrating your exposure in obvious AI plays is risky. Valuations are stretched in many cases, and separating hype from substance requires serious due diligence.

The smarter approach? Target AI thematically while maintaining regional and sector diversification.

What does that look like in practice?

• Focus on companies with tangible results. Not promises. Not projections. Actual measurable benefits from AI adoption.

• Consider AI-adjacent opportunities. Power suppliers, data center infrastructure, and companies rapidly adopting AI across financials, industrials, and healthcare often offer better risk-adjusted entry points.

• Diversify across regions. AI isn't just a Silicon Valley story. European and Asian players are making significant moves.

This approach lets you capture upside from the AI wave without putting all your chips on a handful of high-flyers.

Building Multiple Exit Pathways

Here's a reality check: exit activity has been constrained. M&A and IPO markets haven't fully recovered, and asset holding periods have lengthened as a result. If you're not thinking about exit pathways before you invest, you're setting yourself up for timing risk.

The solution? Build multiple pathways into every investment thesis.

• Diversify across sectors, geographies, and business models

• Consider investments with strategic buyer interest, not just financial sponsor appeal

• Factor in secondary market liquidity from day one

• Look at continuation vehicles as a potential mid-stream option

This backdrop actually creates opportunities if you're positioned correctly. Providers of liquidity: through secondaries, capital solutions, and equity co-investments: are finding attractive entry points precisely because others need exits.

New Access Structures: Evergreen and Semi-Liquid Funds

The way accredited investors access private markets is evolving fast. Traditional closed-end funds with 10-year lockups aren't the only game in town anymore.

Evergreen funds have exploded in popularity. The number of these vehicles doubled to 520 funds in the five years leading to 2024. Why the growth? They offer:

• Greater liquidity compared to traditional structures

• Lower minimums in many cases

• Continuous deployment rather than waiting for capital calls

• Simplified administration

Semi-liquid structures like ELTIFs and LTAFs are particularly attractive for wealth investors who want private market exposure without the full illiquidity commitment.

And here's a development worth watching: the U.S. Department of Labor's 2025 rescission has opened potential access to private markets through 401(k) plans. Large plans are expected to pilot private market sleeves in target date funds, likely starting with private credit. This could dramatically expand the investor base for these strategies.

Operational Risk: The Due Diligence Imperative

With increased complexity comes increased operational risk. If you're diversifying across geographies, strategies, and structures, your due diligence needs to level up accordingly.

Key areas to double down on:

• Regulatory compliance across jurisdictions. European funds have different requirements than US vehicles.

• Tax implications. Cross-border investing adds layers of complexity.

• Manager selection. In a diversified portfolio, you're relying on multiple GPs. Their operational capabilities matter as much as their investment track records.

• Technology and transparency. Advanced tech tools can improve accuracy and visibility across your portfolio. If a manager isn't investing in their operational infrastructure, that's a red flag.

This isn't the sexy part of investing, but it's often where returns leak out unnoticed.

Putting It Together: A Framework for 2026

So what does a well-diversified PE allocation actually look like for an accredited investor this year?

Geographic spread: Meaningful exposure to Europe and the UK alongside North American holdings. Consider emerging markets selectively where you have conviction.

Strategy mix: Balance across buyouts, growth equity, private credit, and secondaries. Consider infrastructure for inflation protection.

Thematic exposure: AI as a theme, not a concentration. Adjacent plays often offer better entry points.

Structure flexibility: Mix of traditional closed-end funds and evergreen vehicles based on your liquidity needs.

Exit awareness: Multiple pathways built into every position. Don't assume the exit environment will cooperate with your timeline.

Operational rigor: Enhanced due diligence on tax, compliance, and manager operations.

The Bottom Line

Private equity diversification in 2026 isn't about spreading your money thin across random opportunities. It's about intentional allocation across regions, strategies, and structures that collectively reduce risk while capturing the alpha that makes PE worth the illiquidity premium.

The market is more complex than it was five years ago. But for accredited investors willing to do the work: or partner with managers who can: that complexity creates opportunity.

At Mogul Strategies, we're helping investors navigate exactly this landscape, blending traditional assets with innovative strategies to build portfolios designed for what's ahead.

The question isn't whether to diversify your PE allocation. It's whether you're doing it thoughtfully enough.