Private Market 2025 in Five Words: Infra, Credit, Sovereigns, Jocks and Wealth

It’s time to jump on the outlook bandwagon and make a handful of educated predictions on trends in private markets for 2025. These are based on some desk-side research, conversations with founders and fundraisers and from writing the headlines in recent months on behalf of clients for many of the stories placed throughout last year.

Ten is always a respectable number for lists, but I am sticking with a well-rounded five in a less-is-more start to the New Year and presented in alpha order to keep it simple, showing no favoritism.

A bit of table-setting first. The market has experienced headwinds with fundraising and then with deploying capital over the last 12 to 18 months, but has kept evolving nonetheless, innovating (think NAV financing, GP stakes, infrastructure secondaries and AI takeover of due diligence) to keep the engine running for sponsors and investors alike.

As a former PE reporter and now communication specialist, the view is always interesting and will likely get more so with several diverse trends from 2024 continuing to steal the spotlight this year to make it dynamic for both the participants and spectators. Here goes:

Data Centers and Energy Transition: Investment dollars from PE firms will continue to flow into the data centers that keep AI and disruptive technologies running and to renewables and the infrastructure that helps them operate. Funds are needed for the transition and returns for many investments improving.

Private Credit: Continued growth seen across a diverse landscape to fuel opportunities, including asset-based lending, especially investment grade, as well opportunistic capital and real-estate financing. A still favorable interest rate environment will keep the M&A machine humming to keep borrowing needs on high and no doubt more consolidation ahead while the big get even bigger.

Sovereign Wealth Funds: Foreign capital will continue to look toward private markets to diversify investments for higher returns. By some accounts, SWFs have $18 trillion in assets that could be deployed into PE funds or as co-investments or direct investments in prized assets. State-backed funds led many of the big deals recently and that trend will continue

Sports: By most counts, institutional investors are owners in 24 teams among the five leagues, a number that is likely to climb. But interest will not stop with professional teams. College teams are the next likely target, spurred on by the lucrative media rights. With the spotlight on sports and investors, will the next stop l be a professional athlete running for politics? Probably yes.

Wealth Channel: Dollar signs are driving the democratization of the private markets with wealth managers sitting on more than $50 trillion of AUM so just a percent or so is a big bang. Education and marketing are keys to success so look for more firms following Blackstone lead as building their brands for consumer audience. (Remember the goldfish bowl on CNBC, bigger fish to catch now.)

This all leads to prospect for a  strong year. Outlook reports from Wall Street predicted that private markets will growth to more than $20 trillion by 2030, or just five years away, from around $13 trillion today. With a look at the five trends, we may see that prediction a bit sooner.

Mark Kollar
Partner, Prosek Partners

Mark Kollar’s monthly Letter from America can be read at The Alternative Investor.