Over the last decade, private markets have expanded and matured and now make up a significant aspect of global finance, accounting for almost a tenth of global investable assets. As a result, an increasing number of investors are open to a trade-off: less liquidity in exchange for higher returns in longer-term investments such as real estate, infrastructure, private equity and private debt.
- Direct lending transaction volumes are correlated to the dry powder raised by private equity funds, which currently sits at record highs.
- Many infrastructure assets have a contractual linkage to inflation, while the attraction of real estate debt can increase during periods of rising rates.
- There has nonetheless been a slowdown in private market activity this year as investors become more cautious about the macroeconomic outlook and events in the public markets.