Latest news with #privateassets
Khaleej Times
3 days ago
- Business
- Khaleej Times
How to invest like a rich person amid market volatility
The wealthy are increasingly seeking investment opportunities that offer less correlation to the public equity markets that have long dominated their portfolios. That search has taken on new urgency following renewed market turbulence in the wake of the Trump administration's April 3 tariff announcements. While shifting towards bonds and cash equivalents provides a degree of insulation, it often comes at the expense of meaningful returns. A growing cohort of family offices and sophisticated investors are now reallocating capital towards private assets — a broad universe that includes private equity, private credit, real estate, infrastructure, and venture capital. These markets have expanded dramatically over the past decade. According to the Economist, private assets under management have surged to $24 trillion (Dh88 trillion) from $10 trillion (Dh36 trillion) a decade ago. That trajectory shows no sign of slowing. Bain & Company estimates that private market AUM will rise to between $60 trillion and $65 trillion by 2032. If realised, private assets would represent nearly one-third of global investable capital — more than twice the projected growth rate of public markets. The Rise of Private Credit Among the most striking growth areas is private credit. Once a niche segment of the market, it has grown tenfold since 2009, with AUM approaching $2 trillion by the end of 2023, according to McKinsey. As traditional banks retreat from corporate lending, the wealthy have stepped in to fill the void — drawn by the promise of attractive yields in a persistently low-rate environment. Fewer Public Listings, More Private Opportunity This structural shift is occurring alongside a broader decline in public market participation. The number of publicly listed companies globally fell from 62,959 in 2018 to 61,170 by the close of 2024. The US trend is even more pronounced: listed firms have declined from a 1996 peak of 7,300 to just 4,300 — a drop of more than 40 per cent. A combination of regulatory burden, increased merger activity, and the abundant availability of private capital has made remaining private an increasingly attractive option. Consequently, an estimated $2.6 trillion in 'dry powder' — capital raised but not yet deployed — now sits on the sidelines, ready to be invested. From the Magnificent Seven to Emerging Growth For forward-looking investors, the appeal of private markets lies not only in diversification but also in early access to the next generation of growth. Sectors such as Artificial Intelligence, climate technology, and biotechnology often reach scale long before entering the public arena. Many HNWIs are now looking beyond the overstretched valuations of publicly listed giants — the so-called 'Magnificent Seven' — to back tomorrow's innovators earlier in their life cycle. Market-Leading Private Asset Products Firms such as Blackstone and KKR have emerged as leading providers of private market access for qualified investors. Examples of a selection of key offerings include: Blackstone Private Equity Strategies Fund (BXPE): Launched in 2024, this non-listed evergreen fund offers individual investors access to Blackstone's flagship private equity platform. Sector exposures include digital infrastructure, technology, business services, financials, and aerospace. Blackstone Private Credit Fund (BCRED): Launched in 2021, it is a direct lending vehicle that targets middle-market companies in the US. BCRED provides a scalable entry point into the fast-growing private credit space. Blackstone Real Estate Income Trust (BREIT): A pioneering launch in 2017, this is a non-listed REIT that offers exposure to income-generating, institutional-grade real estate. Blackstone Mortgage Trust (BXMT) : A publicly listed real estate investment trust focused on originating senior loans secured by commercial real estate assets. Similar offerings are available from other global private asset managers, including Apollo, Carlyle, Partners Group, and Brookfield. The SLY Trade-Off: Safety, Liquidity, Yield Investors entering private markets must carefully consider what might be called the 'SLY' triangle — Safety, Liquidity, and Yield. Typically, optimising for one requires trade-offs with the others. The pursuit of high yield, for example, often entails reduced liquidity and higher risk exposure. For investors accustomed to daily liquidity and mark-to-market transparency, the realities of private markets — multi-year lockups, irregular capital calls, limited secondary market access — can be sobering. Fees also tend to be high, with incentive structures that may not always align with investor interests. Valuation presents another risk. Unlike public assets, private investments are typically valued on a quarterly basis — and often by the fund managers themselves. This creates both opacity and potential conflicts of interest that can be unsettling for those new to the asset class. Proceeding with Caution — and Conviction Given these complexities, financial advisors routinely urge the wealthy to approach private markets with caution and purpose. Allocations should reflect each investor's liquidity needs, investment horizon, and risk appetite — and remain a portion of a well-diversified portfolio. For those prepared to navigate the illiquidity, complexity, and longer time horizons, private assets offer more than just higher potential returns. They offer enhanced risk-adjusted returns, particularly in an era of volatile public markets and fading alpha. Private markets are no longer the preserve of institutional behemoths. But accessing their full potential requires the same level of discipline, due diligence, and long-term perspective.
Bloomberg
6 days ago
- Business
- Bloomberg
State Street Files for Second Private-Debt ETF as First Fund Stalls
State Street Corp. is set to double down on its bid to bring private assets to a broader spectrum of investors, even as its initial ETF experiment in this area has struggled to gain momentum. The fund giant plans to introduce its second exchange-traded fund that tracks private debt with the help of Apollo Global Management Inc. According to an SEC filing dated May 23, the SPDR SSGA Short Duration IG Public & Private Credit ETF will invest in both public credit and 'private credit investments including, but not limited to, those sourced by Apollo.'
Bloomberg
19-05-2025
- Business
- Bloomberg
Guess Where Harvard's Private Equity Will Likely End Up
Imagine an institutional investor that allocates a big chunk of its portfolio to illiquid private assets but then needs to sell some of those investments to raise cash. Or a fund company that makes a fortune on actively managed mutual funds for decades, but its investors move their money to low-cost index trackers. Or a financial research company built around selling ratings of actively managed funds that people no longer buy. Those may sound like three unrelated problems, but they all have a single solution, apparently: Sell private assets to financial advisers and unsuspecting retail investors.
Times
17-05-2025
- Business
- Times
Britain must grasp chance to be a true leader in private markets
Joe Public has often looked on with envy at the healthy returns generated by the great and the good of the Square Mile from more complex and illiquid investments. Global institutional investors have long reaped the benefits of private assets, but retail investors risk being left behind. So that's why, last week, 17 leading financial services firms gathered in the City to sign the Mansion House Accord, a voluntary agreement to boost investment in private assets, including in the UK. But we do now need a proper debate to raise awareness of what they are, the returns they offer and the important role they can play in creating a truly diversified investment portfolio. So what are private assets, what are the investment benefits, and what
Bloomberg
16-05-2025
- Business
- Bloomberg
Private Credit Gets a Scorecard as Morningstar Steps In
Morningstar has been grading stock and bond funds for years, but it's now going to begin rating less-liquid private asset funds marketed to the masses. CEO Kunal Kapoor joined Bloomberg Open Interest to talk about the initiative. (Source: Bloomberg)
