For private equity, we see three key themes in the year ahead:
1. Lower interest rates could spark a new wave of deals as, on one hand, sponsors seek to deploy capital raised in the past three years and, on the other, managers may be willing to part with existing investments as cheaper borrowing costs may bolster valuations.
2. We believe the secondary market can offer excess return per unit of risk when compared to other private market strategies due to a variety of factors, including a rapidly evolving secondary investment landscape.
3. There is plentiful demand for hybrid solutions, including M&A financing and capital for growth, re-equitization of over-levered balance sheets, owner and sponsor liquidity solutions, and financing to support public company growth initiatives.
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