Private markets have had an unusual few years, and it’s worth taking a step back to talk through where things stand and how we’re thinking about the opportunity set ahead.
The most important theme we’re seeing across private equity, venture capital, real estate, and private credit is the same one: quality is being rewarded, and much else is being left behind. Deal activity in private equity has slowed, but the best businesses are still attracting strong demand and premium prices. Fundraising tells a similar story. Top-tier managers continue to raise capital quickly, often above their targets, while managers without a clear edge are struggling. That’s not a new phenomenon, but it has become more pronounced, and it reinforces something we’ve believed for a long time: in private markets, manager selection isn’t a nice-to-have, it’s the whole game. The dispersion between the best and the rest is wide, and it’s getting wider.
Venture capital has narrowed even further. Capital has concentrated heavily around a small number of companies perceived to be the clear winners in artificial intelligence, and those companies are raising extraordinary amounts of money at record valuations. That concentration creates real opportunity for investors with access to those names, but it also means the venture landscape outside of that group is considerably tougher than the headlines suggest. We continue to believe diversified, disciplined exposure to venture, rather than chasing the handful of names getting all the attention, is the more durable way to participate.
Real estate remains a more mixed picture. Higher interest rates continue to weigh on large parts of the market, particularly anything reliant on cheap financing or facing oversupply. At the same time, certain sectors, such as data centers and industrial, continue to attract significant capital because the demand drivers behind them are structural rather than cyclical. We think that split will persist for a while yet, and it argues for being selective about property type and location rather than treating real estate as a single, uniform asset class.
One of the more encouraging developments has been the gradual reopening of the IPO (initial public offering) window. After several quiet years, we’re seeing a broader range of companies pursue public listings, which matters more than it might seem at first glance. A healthier IPO market gives private equity and venture capital firms a real path to exit existing investments and return capital to their investors, something that has been in short supply. It doesn’t mean every private company is suddenly a candidate to go public, but the fact that the door is open again is good news for anyone holding private investments that are waiting for a liquidity event.
We’re also keeping an eye on a couple of policy and market developments that could matter to your portfolio over time. There’s meaningful discussion in Washington about expanding access to private markets within retirement plans, including 401(k)s. If that happens, it could open up a large new pool of capital to private strategies, but it would also introduce real complexity around liquidity, valuation, and suitability that plan sponsors and investors will need to navigate carefully.
Separately, we’re watching a countertrend to the IPO story: private equity firms taking public companies private again. It’s a reminder that capital doesn’t move in only one direction, and that the relationship between public and private markets is more fluid than a lot of commentary suggests.
Taken together, none of this changes our overall approach. We continue to believe private markets offer a genuine opportunity for long-term, patient capital, but only when it’s paired with real discipline around manager quality, diversification across strategies and vintages, and a clear understanding of the liquidity you’re giving up in exchange for that opportunity. Private investments aren’t right for every dollar in a portfolio, and they’re certainly not a place to chase headlines. They reward the same things they always have: patience, selectivity, and a long time horizon.
As always, we’d welcome the chance to talk through how this fits into your specific situation — whether that means reviewing your current private market exposure, discussing a new opportunity we’re evaluating, or simply answering questions about anything above. Please don’t hesitate to reach out.
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