Private markets continue to outperform public markets

Oksana Patron

13 March 2023

Despite volatility, private markets have continued to outperform public markets, according to US-based private markets investment firm, Hamilton Lane.

In its “2023 Market Overview” the manager forecast that rate rises would soon stop as the inflation has already peaked, at least in US, and the economic downturn was believed to be more severe in Europe compared to the US, where only mild downturn was expected, and there would be no downturn in Asia.

Also, despite concerns that some private markets valuations were misleading, Hamilton Lane data showed valuations were generally accurate across most industry sectors, with managers often exiting deals at a premium to reported value.

Additionally, fundraising figures for 2022, while were still at historically high levels, were expected be down compared to 2021 numbers – and, according to the study,  a more challenging fundraising market will persist in the year ahead.

Hamilton’s data showed that private markets investments continued to provide greater returns than listed or public stock markets and the firm suggested that investors “lean into [private market] credit, infrastructure and secondaries”.

For business owners, the manager suggested to “invest in technology and people” as doing so “will have the best reinvestment return of anything else you do.”

The firm also predicted that private credit, secondaries and infrastructure would provide compelling opportunities in the year ahead.