Despite a challenging real estate market, Blackstone (BX), the world’s largest alternative asset manager, recently reached $1 trillion in assets. That was a first for the industry. As remarkable as that data point is, I believe it’s only the beginning.
For example, let’s consider private equity, the largest component of alternative investments by AUM. S&P calculates that the sector has a record $2.6 trillion in uncommitted capital. These dollars will eventually find a new home, with the U.S. the likely destination for most of it. U.S.-based asset managers, their portfolio holdings, and their investors are direct beneficiaries of this capital being allocated. A similar situation applies to private credit, and to a lesser extent real estate. The outgoing administration maintained one of the most restrictive approaches to mergers and acquisitions (M&A). That has had a notable cooling effect on capital markets. A more M&A neutral incoming administration, high amount of dry powder, and expectations of lower interest rates create a major potential tailwind to both private and public markets.
CommonGood’s purposefully focuses on strategies and asset classes that are less sensitive to the broader economy. That said, looking forward to 2025, we expect increased liquidity and deal-making across all the major alternative investment categories to create attractive opportunities for us, our financial advisor partners, and their clients.
