Where do investors think the private market wins are in 2024?

Where do investors think the private market wins are in 2024?
Adams Street Partners report highlights growing optimism in market.
MAR 06, 2024

Private market investors are growing in confidence as headwinds ease and are preparing to increase their deployments during this year.

A survey of institutional investors in the US, Europe, and Asia Pacific by private markets investment firm Adams Street Partners reveals sentiment that private market investments are more resilient than their public market counterparts. It’s the fourth straight year that the firm’s survey has supported that opinion.

Almost 90% of respondents believe that private market investments will outperform public market equivalents in 2024, and two-thirds intend to increase their deployments to these investments.

While conditions are improving, there are still concerns around the impact of interest rates and inflation on private markets. But while 39% of respondents said this in 2024, it is well below the 55% who felt this way a year ago, driven by almost half of poll participants who expect rates to be lower at the end of 2024.

OPPORTUNITY AND RISK

Geopolitics remain a concern, with 55% of respondents citing the US political climate as the biggest threat to global economic stability and growth. However, North America is considered the best region for private investments in 2024 by 21%, just ahead of Europe (20%) and also beating China (19%) and Asia Pacific (13%).

The report found that the top private market investment sectors for opportunity according to respondents are technology and health care (40%), with AI driving this. Financial services are favored by 35%. More than a third are looking at secondary markets for opportunities, and private credit is also set for increased investment.

“Interest rates appear to have peaked and stabilized and may modestly decline this year, which should result in a pickup in deal activity and liquidity,” Jeff Diehl, managing partner and head of investments at Adams Street, said in a statement. “Our experience over more than 50 years tells us that great companies can succeed in any interest-rate environment, so our focus is on getting investment exposure to some of the best private companies.”

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