Private Markets at an Inflection Point – Goldman Sachs Exchanges

Private Markets at an Inflection Point – Goldman Sachs Exchanges — Transcript

Market views

Bullish

PE— Private equity is positioned for strong distributions over the next 1-3 years as economic growth continues, debt prices ease, and LP pressure forces GPs to monetize. The asset class has historically delivered alpha and illiquidity premium over long periods despite recent underperformance.
PRIVATECREDIT— Private credit remains a resilient asset class with default rates at 2% versus historical 10%, and even in stressed scenarios would see only 5% losses versus 50%+ equity market drawdowns. Current concerns are primarily about liquidity mismatches rather than systemic credit problems.
SECONDARIES— The secondary market for private investments is experiencing rapid growth and could reach $500 billion in the next 3-5 years, providing crucial liquidity solutions for private market investors.
INNOVATION— The innovation economy is staying private longer with companies taking 14 years to IPO versus needing public markets earlier, as massive amounts of capital are now available in private markets for growth companies.

Bearish

SOFTWARE— AI is creating significant uncertainty for private equity's 30% exposure to software companies, with questions about what will happen to these investments as AI transforms the sector.

Not investment advice.