In BlackRock’s 2024 Private Markets Outlook, the firm's investors discuss the past year for each asset class and explore where each one is going in terms of specific opportunities, the current risks, and some of the shifts that make this a unique time for private markets investors.
Embracing a changing world
Despite continuing uncertainty, we are embracing the structural changes reshaping our world. And private markets are uniquely positioned to benefit from these mega forces: digital disruption and AI, the low-carbon transition, demographic divergence, the future of finance and geopolitical fragmentation. Whether it’s infrastructure’s importance to the transition or the role of real estate in helping societies adapt to demographic change, private capital will be essential.
We believe private markets are sometimes viewed as a single investment option, but as this Outlook shows, they span different sectors, geographies, investment styles, and risk appetites. There is no one type of “private asset” and the key to a successful portfolio is recognizing the differences and choosing the right option for an investor’s needs.
Key takeaways
While the markets remain volatile, the ongoing shifts to the broader economy and investing landscape have poised private markets for growth.
The mega forces reshaping our world drive many of the opportunities we see across different private asset classes.
Continued volatility and persistent inflation has highlighted infrastructure’s resilient cashflows, while the essential nature of many infrastructure assets mean it is less tied to economic cycles than other asset classes.
While private debt continues to grow, the higher cost of capital will drive dispersion. A nuanced and defensive approach will be critical in 2024.
In private equity, high interest rates are driving cash-strapped companies to seek more equity financing, while low transaction volumes are creating attractive situations for buyers in the secondary market.
While real estate values are resetting, there are attractive opportunities in several property types, including industrial and logistics, necessity retail and some types of residential.
The full report can be downloaded by clicking here.