The macro environment in 2024 will likely spur demand for private assets from all types of investors in our view. In this higher-for-longer environment, private assets could continue to be a compelling source of risk-adjusted returns, income and diversification.
Private assets are not traded on public exchanges. They can include debt, equity, real estate, infrastructure, farmland and timberland. While covering a broad range of asset types, private assets share similar investment characteristics in many instances:
- Stability: Private market pricing helps avoid public market noise, reducing volatility.
- Return and income potential: Limited liquidity has often been viewed as a limitation, but that same illiquidity creates opportunities. Private markets are perhaps best known for their high return potential compared with similar public assets.
- Resilience: Long-term cash flows are a feature of many private real assets often with contractual payments that adjust for inflation.
- Diversification: Private real assets generally have low or negative correlations with listed equity and bonds, and bring additional sources of alpha to a portfolio.
Explore our asset class outlooks for 2024: