Private markets are constantly evolving, and new investment opportunities continuously arise. Who would have conceived ten years ago that AI would fuel demand for computation power at an exponentially increasing rate and, consequently, data center financing and investments in related power needs would require such vast infrastructure investments? Keeping a finger on the pulse of new trends matters for asset allocators and manager selection professionals. Being an early mover into nascent private markets segments could lead to attractive returns. Keeping abreast of current market conditions is also sensible risk management. By nature, private investments cannot be reversed easily, and commitments into the space will typically have long-term implications. Allocating money to private markets means making a long-term commitment and facing uncertain outcomes, given the wide dispersion of performance between asset classes, asset managers and the respective funds they manage, see for instance Kelly et al. (2025).
in VBA Journaal door Richard Sanders and Paul McMillan