Institutional asset managers are cautiously optimistic about 2025, anticipating that a pro-business White House and falling interest rates could boost mergers and acquisitions (M&A) activity and enhance liquidity in private markets, according to a Chief Investment Officer article. Sectors like green energy, infrastructure and data center real estate also show promise, though risks such as market shocks and private credit vulnerabilities remain key concerns.
Challenges persist, however, including uncertainty about the U.S. economy, risks in booming private credit markets, and continued struggles in private real estate, particularly office spaces. While private credit remains a bright spot, competition has narrowed returns, and evolving economic policies may temper expectations for lower interest rates. Private equity faces hurdles from prior over-investment but sees potential for
