Can investors still find an edge in private markets?
The world’s sovereign wealth and pension funds have poured headlong into private and illiquid asset classes over the last 10 years. This may make logical sense for investors, but it raises questions about capacity, valuation and sense.
For a decade now, private markets have been seen as a magic bullet, a solution to a range of ills.
Low interest rates and no decent yield available in public debt? Re-allocate to private markets. Equities toppy and lacking fundamental strength? Private markets will do the trick. Inflation rampant? A swift allocation to private markets will hedge us nicely.
Many investors making such decisions are highly sophisticated institutions with dedicated in-house teams, and they have good reason for their allocation decisions.