Mackenzie's report highlights rising demand in private equity, credit, and infrastructure investments
Mackenzie Investments, in partnership with Northleaf Capital Partners, has released its first-ever Private Markets Outlook.
The report offers financial advisors and investors insights into key private market asset classes and highlights the main drivers of expected growth in private markets investing.
The report focuses on opportunities in private equity, private credit, and private infrastructure, driven by companies choosing to remain private for longer and the need for private capital to support infrastructure projects that modernize economies.
Additionally, market volatility is pushing investors to explore options outside of traditional public investments.
Allan Seychuk, vice president, Alternatives at Mackenzie Investments, noted, “With the recent volatility in the broader public markets, we expect to see accelerated growth in the private markets given the growing range of accessible, compelling investment opportunities, many of which are still largely untapped by individual investors.”
He added that new fund structures have made private market investments more accessible to individual investors, expanding available opportunities.
Northleaf experts in the report identified three key themes with promising mid-market opportunities:
Private Equity and Mid-Market Secondaries: The private equity secondary market has grown in transaction volumes in 2023 and the first half of 2024, as a slower M&A environment has led to longer holding periods for private equity portfolios.
This growth has spurred institutional investors to seek liquidity solutions for new investment opportunities and portfolio risk management. Even with this increase, secondaries account for less than five percent of the private equity market, leaving significant growth potential.
Private Credit Opportunities: As regulatory restrictions push banks away from lending to private companies, private lenders may find opportunities to provide the flexible capital solutions required by these businesses.
Private credit lending has historically offered a return premium compared to public fixed income, with strong capital preservation and reduced volatility.
Demand for Infrastructure Assets: Northleaf anticipates continued investment in critical infrastructure such as roads, bridges, and power generation due to the need to repair and maintain aging structures.
Public funding alone cannot meet the large capital requirements for such projects, creating opportunities for private infrastructure investment.
New sectors like sustainability and technology add further potential for growth, making private infrastructure one of the fastest-growing segments in private markets.
Nadim Vasanji, managing director at Northleaf Capital Partners, remarked, “Private investments have proven to be resilient across economic cycles, contributing important return and diversification benefits to portfolios.”
“Going forward, we expect to see more investors incorporate and grow private asset exposure in their portfolios as a complement to their public market holdings.”
