We favour infrastructure investment due to its strong growth outlook and steady cash flow. Although volumes remain lower than a few years ago, the market is active Lower interest rate expectations are supporting activity, while the energy transition will drive growth in the years ahead. Governments are supportive of private capital, as it is needed to complement public funding in building renewable energy infrastructure, meeting transport electrification targets, and digitalising activities, as well as supply chains.

Turning to private equity volumes are progressively ticking up, helped by interest rate cuts, while pricing has stabilised. Trading is taking place in high-quality, non cyclical sectors (eg business services, healthcare, and software areas). These are profiting from strong structural growth, pricing power, and robust cash-flow generation. Meanwhile, high valuation multiples in the listed market ensure that the private market’s relative valuation levels are offering more attractive entry points than they were a year ago. As regards private debt, companies are still benefiting from strong bargaining power in negotiating lending contracts, partly due to bank financing remaining constrained albeit this constraint has eased somewhat over the last six months.

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