Investment Outlook 2024: Private Assets

We believe private markets are entering a new era. Geopolitical and economic tumult has ended a long phase in which investors have not needed to make many strategic adjustments.

Rates and inflation were low, liquidity abundant and value chains growing longer as a result of globalisation. But that has started to change. Investment strategies that have been successful for a long time may face new headwinds.

We believe the next phase will be defined by what we have called the “3D Reset”, as well as the huge change that technological advances - particularly the AI revolution – will create.

The 3D Reset highlights three key themes of decarbonisation, demographics and deglobalisation.

Decarbonisation is expected to create investment opportunities in renewable energy, infrastructure, and sustainable buildings. It also encapsulates an expected shift towards a “circular” economic model, in which waste is designed out of the products we use, and reuse of materials factored in.

Demographics will create investment opportunities that differ significantly depending on location. Aging populations in developed markets are expected to drive sustained demand for age-restricted housing and healthcare-related investments. Conversely, many emerging economies, like India, have young populations with the potential to create huge amounts of growth.

Deglobalisation reflects the growing trend of nearshoring initiatives, as geopolitical tensions and shifting of power global dynamics reshape supply chains around the world. The US, having been the dominant economic and political power for over 50 years, faces strengthening competition from China and India.

We expect artificial intelligence to start a new industrial revolution, which huge impact across many, if not most, industries. Generative AI is the “frontier technology” underpinning most applied artificial intelligence now, but its potential extends much further.

Looking ahead, we believe investors should evaluate if the strategies of the past are suited to the new world we are entering.

This is a time to be forward-looking, and thoughtful.

The 3D Reset and the AI revolution mark a new era for private assets investment. By focusing on long-term trends, diversifying portfolios, and rethinking past strategies, investors can navigate this new era successfully.