The New Year will mark a turning point for private market investors. While the Fed’s rate-hiking cycle over the past two years has been challenging, many investors approach 2025 with cautious optimism.
The first US Federal Reserve rate cut at the end of last year has been interpreted by many economists as the beginning of the end of the global rate-hiking cycle. This could offer much-needed relief for investors in private equity, real estate, and infrastructure in particular, who have seen transaction volumes slump over the past two years.
But significant headwinds remain, notably the prospect of tariffs being introduced in the US, which could have an inflationary effect, possibly delaying further rate cuts. This, in turn, could provide a major headache for private equity and infrastructure investors, who so far have managed to dodge the worst of refinancing risks.
The latest issue of the Private Markets Profile is out now and available to view at www.privatemarketsprofile.com – and explores the investment outlook for 2025 and the sub-sectors that might offer some resilience amid an increasingly uncertain macroeconomic environment.
One of these sub-sectors is grid infrastructure. Many institutional investors have identified the energy transition as one of the megatrends defining their portfolios for the decades to come. This has so far particularly benefited assets like renewable infrastructure and data centres. However, scaling up renewable infrastructure can only succeed if there is sufficient grid infrastructure in place to match these ambitions. The issue takes a closer look at this emerging infrastructure investment sector.
Meanwhile, the UK’s Local Government Pension Schemes (LGPS) are facing growing pressures to invest in private markets. One LGPS pool that recently ramped up its private market ambitions is LGPS Central, which at the end of 2024 reported more than £6bn in commitments to alternatives, and co-CIO Nadeem Hussain explains the strategy.
The Q1 2025 issue of the Private Markets Profile is sponsored by Cheyne Capital, Fiera Capital, Pemberton and SwissLife Asset Managers UK.
In a range of thought leadership pieces, Swiss Life Asset Managers UK outlines how institutional investors can play a key role in breaking the bottleneck in funding UK real estate, particularly in regions that are often overlooked by investors, while Pemberton explains how it can help local government pension funds meet cashflow needs with stable and diversified income streams.
Fiera Capital discusses the outlook and opportunities in real estate debt, while Cheyne Capital explains how, in the crowded world of private credit, non-sponsored lending, real estate debt and significant risk transfer transactions still offer space for opportunity.
Head to the dedicated Private Markets Profile website to read the latest issue of the Private Markets Profile.
