Market weakness started in late February, primarily driven by a valuation correction in the US tech sector and a de-concentration of most crowded stocks. This was amplified by declining sentiment amongst households, corporations, and investors.
Executive Summary
- We seek to analyse how Private Assets (PA) likely behaved during the recent market selloff, based on two complementary approaches: liquid proxies of PA returns and PA’ sensitivities to macroeconomic trends.
- Both models suggest that PA is likely to demonstrate reasonable resilience.
- However, the potential decline in corporate activity is a significant wildcard,which could undermine the early recovery observed in private deals.
- Thus far, since the selloff was primarily driven by a rebalancing of global allocations, we do not anticipate a significant reweighting impact on investors’ PA holdings.
- Overall, we expect that PA will once again showcase their diversification benefits.
You can now read the full whitepaper at the link below
