The private markets house view (PMHV) for the first half of 2024 examines how economic conditions may influence market valuations. Against a backdrop of enduring inflation and interest rate increases in 2023, what can investors expect from the different asset classes in 2024?

Private equity

  • Persistent inflation amid a high interest-rate environment is affecting private equity, particularly around exit strategies. Investors and sponsors are increasingly turning to continuation funds and secondaries to extend exit timelines.
  • Deal size was smaller because of higher borrowing costs and valuation corrections, but the available cash touched an all-time high as investors waited for a more favourable dealmaking environment. Coupled with a slower pace of capital deployment, this could exert further pressure on dealmakers and result in performance implications.
  • While North American fundraising grew steadily, Europe experienced healthy growth, attracting capital flows from the US towards European megafunds. We saw a shift in deal types, with ‘take-private’ transactions diminishing in prevalence and smaller, lower-leverage transactions gaining in prominence. 
  • With a slowdown in start-up dealmaking, venture capital and growth funds will likely de-risk investments by backing repeat entrepreneurs in non-cyclical sectors. These include health technology, biotechnology, climate technology, enterprise software, and companies with an edge in applying generative artificial intelligence technology.


  • Investor interest in digital and data infrastructure, and energy-efficient technologies remains strong. Prices for these assets are resilient. Infrastructure has a key role to play in the energy transition and in improving social outcomes. 
  • In the US, the Inflation Reduction Act is accelerating regulatory developments to support the region, as infrastructure spending remains a key strategic priority over the medium-to-long term. Asia-Pacific (APAC) fundraising remained subdued during 2023. Investor appetite was conservative, with a preference for core, core-plus and debt strategies. 
  • A more normal fundraising pace within infrastructure may be in progress now. Between energy security and decarbonising power generation, infrastructure capital has increased. 
  • The asset class showed structural resilience with lower-risk core funds exhibiting strong internal rates of return. Globally, the transport sector dominated, followed by energy and renewables. 

Real estate

  • In the US, more price discovery is expected in 2024, as elevated interest rates and a mild recession could lead to attractive prices for selected assets. Office valuations are falling, with a sharp repricing for secondary assets. Industrial and logistics could see performance normalise in 2024, after exceptional growth over the last few years. 
  • Across Europe, we believe the yield correction is nearing the end. Rates are peaking and expected to stabilise. For core and value-add strategies in the UK and Europe, we prefer logistics, alternatives, the private rented residential sector, and selected retail formats. 
  • In APAC, we expect lower interest rates to support better capital returns beyond the immediate 12-24 months. Higher property yields in the near term are likely to provide good entry opportunities for investors to pick up grade-A assets in core locations. Better outcomes are expected for Australian logistics properties, offices in Seoul, and properties in Singapore.

Private credit

  • Appetite for private credit experienced a steep increase in 2023, as banks retreated amid tighter lending markets. Investment opportunities are picking up and this is driving down costs for smaller business investments. Looking at strategies, there's been a growing uptick in direct lending and large-cap private credit loan securitisations. 
  • Direct lending has been a key theme in providing capital not just to small businesses but to larger buyouts. Lenders are looking for portfolios that would be resilient in economic downturns. They favour sectors such as healthcare, business services, and enterprise software. 
  • Lenders could engage high-quality borrowers on advantageous terms. Emerging markets such as India provide strong headwinds for private debt opportunities, as demand in APAC remains robust. 

Natural resources

  • Deal activity within natural resources has been on a gradual increase. Fundraising and volumes are heavily driven by the global energy market, which is not surprising in the near term.
  • However, environmental regulations in the US and Europe favour capital needs towards the asset class. We expect energy security and autonomy to be a key focus area that can provide further momentum globally.
  • With increasing demand for minerals and natural-based resources on the horizon, governments are putting more emphasis on energy transition. We also prefer sectors such as advanced agriculture and timber, given they are long-term in duration and real assets by nature. 


  • Given the uncertainties associated with geopolitics, and the timing and extent of interest rate cuts, we expect to see a gradual recovery of valuations in private equity market. We anticipate a focus on sectors such as pharmaceuticals, life sciences, financial technology, and biotechnology. Surging demand for private credit will continue, particularly in Europe and the Americas.
  • There will be selective opportunities in real estate globally. Investors are increasingly attracted to infrastructure because of its long-term horizon and stability. We see more nature-based opportunities emerging for sustainability.
  • Our focus is on strengthening diversification across the private market asset class. We like assets that are appropriately priced and that give fair compensation for risks. As ever, working with the right partners who have credible risk management and established track records is key to success.