Displaying items by tag: private equity
Private Infrastructure Investing Moves Into the Mainstream
Private infrastructure, once limited to institutions and ultra-wealthy investors, is quickly becoming more accessible as new funds open to individuals through financial advisors. A recent BlackRock survey found that nearly a third of wealthy family offices plan to expand or begin infrastructure allocations, reflecting growing confidence in the sector’s stability and income potential.
Demand is fueled by themes like artificial intelligence, which drives the need for more data centers and energy capacity, alongside global investment in essential assets like transportation and communications networks.
These strategies contrast with infrastructure ETFs and mutual funds, which focus on public equities tied to the sector and tend to prioritize growth over income.
Finsum: While private funds offer higher potential yields through the “illiquidity premium,” investors must weigh their limited liquidity and longer investment horizons.
ETFs have Expanded the Private Market to Public Investors
The democratization of private markets is accelerating as asset managers, regulators, and ETF innovators work to expand investor access to what was once an institutional-only domain. Once viewed as opaque, illiquid, and high-cost, private markets have grown from $4 trillion to $15 trillion in assets over the past decade, as investors seek diversification, income, and long-term growth beyond public markets.
ETFs are now at the forefront of this movement, with products like the SPDR SSGA Apollo IG Public & Private Credit ETF (PRIV) breaking new ground by offering direct exposure to private credit within a liquid wrapper. credit CLOs, each offering a distinct way to capture the returns of the private economy.
As demand grows, firms like VanEck note that private market managers are increasingly expanding into wealth management and retirement channels, further broadening investor participation.
Finsum: The push to make private assets more accessible marks one of the most disruptive and promising frontiers in modern investing.
Industry Leaders Say Small Private Equity Firms Could Be In Trouble
Private equity leaders are cautioning that while industry assets are likely to keep expanding, the number of firms competing for those dollars could shrink dramatically. KKR’s CFO Robert Lewin and Apollo’s president Jim Zelter both suggested that smaller managers, burdened by high fixed costs and limited fundraising capacity, may not survive the next cycle.
Lewin forecasted a wave of organic consolidation over the next five years, while Zelter warned that many firms may already have raised their last fund without realizing it. Larger players, by contrast, are positioned to thrive, offering a wider array of products and attracting investors eager to simplify their GP relationships.
Consolidation could also accelerate through acquisitions, with bigger firms absorbing weaker rivals.
Finsum: The same pressures are expected to spread into venture capital, where scale and distribution strength are becoming just as critical.
Thematic Investing is a Win for PE
Private equity firms are increasingly exploring thematic investing as a pathway for growth, blending financial returns with measurable social and environmental impact. Summa Equity has pioneered this approach through a “theory of change” framework, focusing on themes like resource efficiency and tech-enabled transformation.
By investing across interconnected industries, the firm aims to tackle systemic challenges such as decarbonization while generating attractive long-term returns. This model contrasts with traditional ESG investing by emphasizing measurable outputs—like emissions reductions or improved quality of life—rather than compliance-based inputs.
“Brown-to-green” strategies, which transform undervalued, high-emitting businesses into sustainable leaders, can unlock massive value while addressing climate goals.
Finsum: While many large PE firms have been slow to adopt this cross-sector strategy, thematic investing’s potential to deliver both impact and superior returns suggests it could reshape the industry’s future.
How Much Alt Exposure Do Your Clients Need?
In the evolving “post-60/40” investing landscape, alternatives often come with higher fees and reduced liquidity, but investors tolerate these trade-offs for the potential of higher returns and skilled management. Wealth managers stress that allocations should reflect an investor’s liquidity needs, risk tolerance, and experience, with recommendations ranging from a cautious 10% to as high as 50% for those with no short-term cash flow requirements.
While some, like Marina Wealth’s Noah Damsky, seek niche managers with unique strategies, others—such as International Assets Advisory’s Ed Cofrancesco—favor straightforward private real estate projects for their simplicity and transparency.
Ballast Rock Private Wealth’s Andrew Mescon highlights private credit and private equity secondaries as compelling opportunities, citing diversification, downside protection, and discounts to net asset value as advantages. Managers also note the growing role of evergreen fund structures, which can ease liquidity constraints and broaden access to these asset classes.
Finsum: Ultimately, successful alternative investing hinges on aligning product complexity, fees, and liquidity with each investor’s unique financial situation.