Insights and Advisor Resources

Private equity conditions have improved modestly from last quarter, supported by better exit activity and somewhat lower dry powder, but the backdrop is still selective rather than broad-based. We continue to favor the middle market and still see secondaries—especially general partner-led/single-asset continuation vehicles—as attractive.

We remain broadly constructive on US private credit while remaining slightly cautious on corporate direct lending. Though absolute spreads are tight and competition remains elevated, forward deployment still looks attractive relative to public credit on a relative spread basis. Negative headlines and fundraising pressure have the potential to increase spreads—improving attractiveness—but we may see multiple quarters of redemption pressures first.

Private Real Estate: The outlook is broadly unchanged from last quarter, but with a firmer underpinning. Fundamentals remain strongest in sectors such as multifamily and industrial, while office remains the clearest laggard. The medium-term opportunity is attractive, though returns will depend heavily on interest rates and policy, and transaction evidence still suggests some gap between appraisal values and clearing prices. Real estate credit also remains attractive given elevated yields and a large refinancing pipeline over the next two years.

Commodities: We remain neutral on commodities overall. Energy markets already reflect a significant geopolitical risk premium. Gold has become more attractive after the recent pullback, with positioning likely cleaner and prior pressure from higher real rates already absorbed. At the same time, the AI capex buildout should continue to support demand for select industrial metals and energy markets.

We are neutral but more constructive on long/short equity managers as catalysts across regions support an attractive environment for stock selection. We have a neutral but modestly declining outlook on event-driven strategies, as elevated market volatility can tamper confidence, leading to less deal activity. The global macro environment remains broadly supportive, with elevated market volatility expanding the opportunity set. Commodity managers face an opportunity set that is rich but challenging, as renewed volatility increases tail risks for directional and relative value strategies.