2025 the year of secondaries and sustainability: bfinance

The latest Manager Intelligence and Market Trends report from global investment consultant, bfinance, has highlighted several macroeconomic concerns and uncertainties that are currently plaguing investors and asset managers.

The report indicated that while private markets had experienced a slowdown in fundraising, recording its lowest level in a decade, secondaries transactions and mega-fund closings had soared, paving the way for a strong year ahead.

Similarly, within the private markets segment, private debt continued to present as “a dominant force”, captivating investors with diverse and “niche” methods of income generation such as Healthcare Direct Lending and Special Situations, and accounting for over 40 per cent of private market searches.

The report also revealed that sustainability continued to lead the pack in terms of driving product innovation and addressing investor demand, with particular preference for Impact Private Debt, Carbon Trading and Energy Transition Commodities.

“Private markets fundraising has declined to its lowest level since 2015, though certain segments, such as secondaries, have demonstrated
resilience heading into 2025,” bfinance Australia Senior Director, Frithjof van Zyp, said.

“Private Debt continues to dominate allocations, with growing interest in evergreen solutions and ESG-aligned strategies, including Impact Private Debt.

“Additionally, activity in liquid alternatives has increased, with a strong emphasis on convexity and market-independent strategies aimed at defensive diversification, as investors seek to enhance resilience against macroeconomic uncertainty and liquidity risks.”

The report also indicated several macroeconomic concerns and impacts that investors should remain cautious of, including equity market concentration and the commencement of Donald Trump’s second term as US President:

• “Equity market concentration remains a concern for investors, with the big tech stops continuing to drive returns, which has led to a notable increase in manager searches, accounting for over 30% of new mandates in 2024. Investors are increasingly reassessing regional, style, and factor exposures, seeking to mitigate risks stemming from narrow leadership in large-cap equities.
• The re-emergence of Donald Trump as a key political figure has added a layer of complexity. Policy proposals such as tax cuts, regulatory shifts, renewed energy production initiatives and aggressive use of tariffs are reshaping market expectations, injecting further volatility into an already uncertain environment.”