This is where the next financial crisis could emerge
Borrowing costs have risen, and private equity managers have been having difficulty selling portfolio companies. Yet institutional investors have an ever-growing appetite for illiquid alternative investments.
The recent growth of private markets has been a phenomenon. Indeed, private funds, which include venture capital, private equity, private debt, infrastructure, commodities and real estate, now dominate financial activity.
According to consultants McKinsey, private markets’ assets under management reached $US13.1 trillion ($21 trillion) in mid-2023 and have grown at close to 20 per cent a year since 2018.
