New Delhi [India], October 27 (ANI): Private market investors are expressing optimism about the investment environment and anticipate stronger liquidity and improved exit opportunities across various routes, according to a Goldman Sachs Asset Management release.
The findings stem from its global “Turning the Corner?” survey of more than 250 General Partners (GPs) and Limited Partners (LPs), which indicates that sentiment has held steady or improved across asset classes compared to 2024 levels, with the highest optimism seen in real assets.
According to the release, managers expect a clear uptick in exits. GPs are most likely to pursue strategic sales and sponsor-to-sponsor deals, with an increasing number viewing initial public offerings as viable options over the next year.
“Valuations remain elevated, but with strong capital markets and lower financing costs, dealmaking conditions look more favorable,” said Michael Bruun, Global Co-Head of Private Equity at Goldman Sachs Asset Management.
The survey also notes a growing use of continuation vehicles, while LPs are becoming more active sellers in secondary markets to manage liquidity and rebalance portfolios.
Investor positioning shows that many LPs remain below target allocations across several strategies, including infrastructure, private credit, and private equity, as they continue to expand and diversify their programs.
James Reynolds, Global Co-Head of Private Credit, noted that “private credit, with its unique features, will continue to be an important source of financing activity,” emphasizing that returns depend on origination depth, experience through cycles, and scale.
The survey also finds that co-investments and secondaries remain the largest areas of under-allocation among LPs.
The release highlights growing optimism for infrastructure and real estate. “Infrastructure is benefiting from strong structural tailwinds… The asset class has a 20+ year track record of resilience and inflation protection,” said Tavis Cannell, Global Head of Infrastructure at Goldman Sachs Alternatives.
Jim Garman, Global Head of Real Estate at Goldman Sachs Asset Management, added that opportunities are emerging as valuations and transactions stabilize, though selection remains crucial.
Matt Gibson, Global Head of the Client Solutions Group, said allocators with mature programs are consolidating with existing managers while seeking new ones capable of delivering “idiosyncratic alpha.”
Despite slower distributions, most LPs plan to maintain or increase deployment in 2025, according to the survey. Harold Hope, Global Head of Vintage Strategies at Goldman Sachs Asset Management, said investors are using secondaries to gain diversified exposure with shorter duration and the potential to mitigate the J-curve, while also providing liquidity to GPs and LPs when exit activity lags historical averages.
The survey also points to longer-term structural shifts. More institutions are considering evergreen structures across asset classes, and a significant number view artificial intelligence as a key driver of industry transformation.
For risks, geopolitical conflict ranks as the top concern for the second consecutive year, while worries about recession and borrowing costs have eased amid lower rates or expectations of rate cuts in major markets, the release added. (ANI)
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