PitchBook News - The outlook for H2

As we pass the six-month mark for 2024, the macro trends investors have been paying attention to have largely carried over from last year.

Labor markets remain strong, stock markets have climbed higher, and all eyes are on the Fed looking for tangible indications of a rate cut. Betting markets have had to reset Fed policy rate expectations since the start of the year due to the strength of the US economy and the stubbornness of inflation data.

With that macro backdrop, dealmaking has yet to kick back into high gear. In particular, the exit market has left much to be desired, and many LPs in private funds are wondering when they will get their capital back from their GPs.

Both LPs and GPs are finding creative ways to deal with the distribution drought, finding liquidity from relatively novel sources such as fund secondaries, NAV lending, and other structured solutions.

Meanwhile, traditional exit routes should continue to open up, especially if the economy remains strong and the Fed begins the descent on interest rates. As capital frees up for deployment, investors should ask: "Where are the risks and opportunities across the private market landscape?"

It is with that lens—from the perspective of where to put fresh investment dollars to work—that we published our Allocator Outlook in December and are now providing an update in our latest Allocator Solutions report.

First looking at the macro landscape, we explore the potential economic scenarios that may play out over the coming quarters using a simple growth/inflation framework, with the much-anticipated soft landing becoming increasingly likely.

 

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