Private Markets

Private Markets is a broad term for assets not traded on public exchanges. Investors in private markets have a broad range of asset classes and investment strategies at their disposal.

Private equity assets under management represent approximately 5% of the value of publicly traded stocks. Although much smaller than their publicly traded counterparts, private markets are gaining in popularity. While private market investments require investors to lock up funds for longer, investors have historically been rewarded with higher returns.

Source: CAPE Global Private Equity Index, Cliffwater Direct Lending Index, Cambridge Real Estate Index, MSCI All Country World Index, Barclays Global Aggregate, UBS, October 2023.

Historically, private markets have performed significantly better than publicly listed markets. These additional returns can provide investors opportunities for greater wealth accumulation or to finance ongoing expenses. The outperformance of private markets is set to continue due to key catalysts such as the restrictive, exclusive access to this illiquid marketplace, the value created by private markets fund managers themselves and the use of financially sophisticated practices and stringent due diligence in the private markets selection and portfolio management processes.

Private markets are becoming an increasingly important asset class as they provide access to opportunities that are not readily accessible to investors in publicly listed markets. It is becoming increasingly difficult for investors to participate in the upside of high-growth and innovative companies if they are limited to the publicly traded markets.

We keep you updated about the latest developments and current market environment in our quarterly report.

Private assets can play a key role in a long-term investment plan with benefits both in terms of potentially better risk-adjusted performance over traditional asset classes and enhanced diversification. In today’s market, we see good entry points across private market strategies.

In private equity, we would seek exposure to value-oriented buyout and secondaries funds, and themes such as software, health, education, and climate-related solutions, while leaving pure AI exposure to venture investors.

In private credit, pricing and yields look attractive, and return prospects for direct lenders have improved. We continue to see good potential for both direct lending and distressed/special situation funds.

Finally, we stay selective in private real estate while we continue to like infrastructure given government support and the asset class’ stable return and inflation-hedging properties.