4 min
According to the latest Goldman Sachs survey, the market is ready to converge on the asset class. But geopolitics and valuation gaps risk limiting the rise. Private credit and infrastructure are the most sought-after segments, with the hope of a restart of real estate
Investor optimism towards the alternative asset. This is highlighted by the new survey by Goldman Sachs Asset Management from the title Private Markets Diagnostic Survey of 2024, which shows how successful are above all private credit e infrastructure. A dynamic, the one described by the survey, in which experts however see two threats emerging: geopolitics and evaluations.
Private credit and infrastructure in the crosshairs
Although the general perception is largely positive across all asset classes, with managers being more optimistic than investors, the study highlights some important differences in approach. While allocations on the private market are diversifying, increasing distribution levels, among the segments on which investors continue to actively focus are the private credit and the infrastructure: in the first case, the belief in continuing to achieve constant performance despite the transition from one market cycle to another is generalized; in the second, 75% of the sample say they are ready to support the category again. Where the budget is confirmed to be under-allocated are the strategies focused on private equitywhich gain the trust of a part of the market but suffer from a decline in interest especially from operators active in the United States. The behavior of the real estatewith 38% of investors seeing better investment opportunities compared to 31% of those seeing them as less positive. A picture that confirms what was stated by Dan Murphyhead of Alternative Portfolio Solutions at Goldman Sachs AM, that “sentiment is slowly moving from cautious to courageous,” noted Dan Murphy. “Last year’s survey showed that investors and managers were staying the course while this year optimism is growing everywhere,” he said, underlining how operations on the secondary market and co. are also growing (almost 50% indicate them). -investments.
Increasingly equipped managers
On the industrial front, managers are expanding their offerings. Almost a third of the asset managers interviewed by Goldman Sachs are in fact considering or using the sale of an equity stake to capitalize management companies. With exits slowing due to concerns about high valuations, particularly among investors, the survey highlighted that operators are focusing on top-line growth as the main source of value creation to fill the gap. There is also a shift away from the typical drawdown structure, with semi-liquid vehicles expanding to include equity strategies, and 79% of the market intent on increasing or maintaining the same level of capital deployment. Other factors which are given importance are: liquiditywith managers constantly evaluating solutions to return capital to investors also through an increase in engagement with the secondary market, and theartificial intelligenceconsidered the main driver of innovation in the sector by 37% of those surveyed together with the retail market (20%).
Geopolitics first among the risks
At the top of the list of concerns that continue to grip professionals are the geopolitical riskswhich are replacing fears for a recession or for the monetary policy of the Fed and ECB. If last year the economic contraction was indicated as the main threat by 48% of the sample, this year the share of those who worry about it barely reaches 35% while that of those who have geopolitical conflicts is close to 61%. tops the list of possible threats. An obstacle that goes along with the high ratings, indicated by 40% of interviewees. “Attention to the trend of the macro picture has been reduced in the wake of an improvement in the main market variables,” he commented on the topic Jeff Fineglobal co-head of Alternatives Capital Formation at Goldman Sachs Alternatives. In his opinion, investors appear relatively more attentive to the risk of downside than managers, while the latter appear to be more concerned about regulation than investors.
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