Amundi Investment Institute
Exploit volatility diversifiers (hedge funds and absolute return strategies), liquidity diversifiers (private markets) and macro/geopolitical diversifiers (gold).
Apollo Global Management
We believe the potential for long-term alpha generation remains more attractive via further diversification of portfolios with the inclusion of private markets (both equity and credit).
Bel Air Investment Advisors
Private credit will likely facilitate a significant portion of the M&A activities. Private equity funds that have been on the sidelines will likely have more exit opportunities and begin distributing capital back to LPs.
BlackRock Investment Institute
In private markets, we stick to our long-term preference for infrastructure equity due to attractive relative valuations and mega forces. For income, we prefer direct lending given more attractive yields in private credit.
BlackRock Investment Institute
We see the potential for assets like Bitcoin to provide distinct sources of risk and return. With traditional diversifiers like bonds no longer working as before, investors have more reasons to be dynamic with portfolios.
BNP Paribas Asset Management
In 2025, we see private credit as well placed to attract inflows. The fundamentals of companies across Europe are very strong after extensive deleveraging of balance sheets. Investors are searching for yield, as witnessed by the strength of public credit markets. For those investors with an appropriate investment horizon, private credit can generate attractive risk-adjusted returns relative to traditional fixed income.
BNY
Lower rates and the potential deregulatory environment coming from the new administration should create the conditions for M&A and IPO activity to reignite. We favor buyouts and venture capital funds, both of which have consistently delivered an illiquidity premium over passive public investments in exchange for their longer holding period.
BNY
Private credit is an all-weather allocation in our recommended portfolios. It offers higher current income and has outperformed public debt markets, such as investment grade and high yield bonds, over the last decade. This has been true in both rising interest rate environments and periods of low rates.
DWS
Alternative assets are enjoying little tailwind from monetary policy due to fairly stable interest rates at the long end, but fundamental conditions are improving in many areas, for example in residential real estate.
Fidelity
The need for a diversified portfolio to spread risk also makes the case for private assets. Going into 2025, with many markets still on the cusp of recovery, prices are low and there are opportunities for investment that could deliver solid returns in the medium to long-term.
HSBC Asset Management
Alternative asset classes, such as private credit, offer valuable options to provide diversification and resilience to a global allocation.
HSBC Asset Management
A higher-for-longer rate environment also challenges traditional 60/40 portfolio constructs, with government bonds losing some of their hedge appeal. This adds to the benefits of alternatives like private credit and real assets, alongside the uncorrelated returns of hedge funds.
JPMorgan Asset Management
Given rich public market valuations, lower bond yields and positive stock/bond correlation, investors should leverage alternatives to enhance portfolio return, income and diversification.
JPMorgan Wealth Management
Over the long run, we believe the negative stock-bond correlation will hold. But we see a strong argument for owning assets that can provide diversification to both equities and fixed income. What fits the bill? Historically, real estate, commodities and infrastructure have exhibited low correlations to stocks and bonds. At the same time, diversified hedge fund strategies have proved their worth in the post-COVID period.
JPMorgan Wealth Management
We think capital investment into the power sector is about to ignite for three key reasons: the reindustrialization of US manufacturing, increased use of electrification in clean energy solutions and surging demand from data centers. Investors looking to capitalize on the growing demand for power can focus on broad infrastructure funds, power generation and utility companies.
LGIM
We think macro conditions are supportive of another strong year for private credit, but are watching out for higher-for-longer rates and strong bank competition. Real estate returns are expected to be reasonable, based on yields that have already reset and subsequent income growth – not yield compression.
Lombard Odier
There’s an even greater role for alternative assets to play in extending investment opportunities for multi-asset portfolios. We emphasize the role of real estate, hedge fund strategies and private assets.
LPL Financial
In the private market space, private credit and infrastructure remain attractive, albeit with some moderation in expectations. While challenges persist in private equity, opportunities should exist in the secondary market.
Goldman Sachs Asset Management
As economies adjust, private markets and other alternative assets continue to evolve and attract a broader base of investors seeking to complement their traditional market exposures. We see a diverse opportunity set across private equity, private credit, real estate, infrastructure and hedge funds.
HSBC Global Private Banking
We think volatility and dispersion in equities, fixed income and currencies will continue be substantial. This should benefit long/short and active strategies and underscores the importance of hedge funds as portfolio diversifiers. We maintain our overweight on hedge funds. We are most positive on discretionary macro, systematic equity market neutral, Asian equity long/short, multi-strategy and multi-PM managers.
HSBC Global Private Banking
The sharp decline in values and falling interest rates are starting to boost the appeal of real estate, but investment volumes remain subdued for now. That could start to change with further interest rate cuts and post-US election clarity.
Janus Henderson
While declining inflation may have diminished the need for real assets, inflation may return, and some categories could also benefit from lower rates and serve as a diversifier during a period of heightened geopolitical risk. Private assets within credit, equity, and infrastructure offer potential.
JPMorgan Asset Management
As short-term interest rates settle at more normal elevated levels and as policy uncertainty increases, volatility across financial markets could remain elevated. Both dynamics should benefit hedge funds, which can provide diversification and the potential for enhanced returns. Meanwhile, investments in infrastructure and transportation can provide stability via steady income.
JPMorgan Wealth Management
Falling interest rates and a less onerous regulatory environment could help sustain a nascent revival in dealmaking, which had been essentially frozen since 2021. As a backlog of deals stands ready to be cleared, increased private lending should help jump-start transactions. Opportunities exist across the capital structure. The likely beneficiaries of a better environment for dealmakers? Wall Street banks, private equity and credit firms, and private business owners.
LGIM
While leverage and refinancing costs are likely to weigh on some areas of infrastructure, we think others will see robust asset creation.
LPL Financial
Investors should be prepared for a more dynamic market environment in 2025 and consider the use of alternative strategies to further diversify and enhance portfolios. Equity market-neutral, global macro, and managed futures strategies are well-positioned to capitalize on increased volatility and market dispersion.
Neuberger Berman
Numerous factors are aligning to release a pent-up torrent of corporate dealmaking: above-trend growth; buoyant public equity market valuations; a more stable inflation and central bank outlook; the return of banks to the leveraged lending market; declining rates and tight credit spreads; and, perhaps most importantly, an expected change in regulatory stance in the US. Event-driven hedge fund strategies will benefit from a big new opportunity set.
Northern Trust Asset Management
We believe private credit has room to grow, supported by the shift of lending from traditional capital providers to private credit asset managers, while lower interest rates encourage potentially more mergers and acquisitions in 2025.
Nuveen
In real estate, the office sector remains challenged, but we see compelling ideas in the industrial and alternative segments. We also like publicly listed REITs, where valuations, fundamentals and earnings appear favorable.
Nuveen
Private equity markets remain under some pressure (especially given still-high interest rates), but we do see value in secondary private equity markets, where demand is stronger and should continue to grow.
Principal Asset Management
We believe the private market sectors should deliver improved or steady performance in our base-case economic scenarios in 2025. Even in a less-than-ideal future environment, the current positioning of the private market sectors (real estate, infrastructure, alternative credit, and asset-backed lending) could provide some softening in negative or tail risk outcomes.
Russell Investments
We expect private markets to continue playing an increasingly vital role in the evolving landscape of capital flows, as the shift away from public markets accelerates with fewer IPOs (initial public offerings) and later-stage listings. In this environment, we believe a multi-manager approach is crucial. By diversifying across specialized managers, particularly in real assets, we believe investors can access a broader range of opportunities that blend public and private market investments.
Russell Investments
We see private credit as a resilient asset class, particularly in the current higher-rate environment. With asset-based lending and European direct lending providing attractive relative value, we are broadening our fixed income exposures into these areas to capture higher yields and better diversification. We see attractive investment opportunities in real estate and infrastructure, particularly in areas benefiting from stabilizing long-term interest rates and favorable relative valuations compared to other growth assets.
Schroders
Private markets can also help provide resilience via exposure to different types of assets that are typically more insulated from geopolitical events than listed equities or bonds. Examples include real estate and infrastructure assets that offer resilient long-term cash flows, as well as assets like insurance-linked securities, where weather is the key risk factor.
State Street
Investors should look beyond the traditional balanced (“60/40”) portfolio and evaluate alternative exposures from a diversification, risk mitigation and alpha generation perspective. Allocations to real assets, commodities, infrastructure, digital assets and private assets could potentially offer higher returns, lower volatility and enhanced diversification.
T. Rowe Price
Evolving economic and market conditions could expand opportunities for private market investors. Private credit will cater to complex financing needs, while potential IPOs and increased M&A activity, driven by lower interest rates, may offer liquidity avenues for private equity investors.
Truist Wealth
Alternatives should help qualified investors navigate markets and embrace wider outcomes. Hedge funds are likely to offer opportunities amid global crosscurrents and asset class return dispersion. Private markets should benefit against the backdrop of lower yields and a pickup in mergers and acquisitions, improved business sentiment, and deregulation. We still find value in holding a modest gold position as a portfolio diversifier.
UBS
The outlook for residential and commercial real estate investments is bright. With constrained supply and rising demand, there are opportunities in sectors including logistics, data centers, and multifamily housing.
Wells Fargo Investment Institute
In private capital, we maintain our favorable guidance on growth equity and small- and mid-cap buyout strategies as deal activity continues to highlight preferences for quality growth and less debt. If economic growth accelerates in 2025, as we anticipate, we favor allocating to strategies with the flexibility to adjust to changing market conditions, such as equity hedge – directional, relative value – long/short credit, and macro – discretionary.