Global Outlook for Private Debt and Equity Markets

This technical report by Allianz Research examines the current state and future outlook of private debt and equity markets amid high inflation and rising interest rates. It details how these economic factors have tempered enthusiasm and lowered return expectations, leading to cautious investor behavior. Despite these challenges, private assets remain attractive due to their potential for higher yields and diversification. The report outlines the growth of private debt, which has increased by 60% to USD 1.6 trillion over the past five years, and discusses the anticipated easing of monetary policy, which may renew interest in private markets. It highlights the vulnerabilities of private markets to external pressures such as geopolitical tensions and liquidity shortages. Additionally, the report notes the ongoing interest in private equity, driven by trends like artificial intelligence and ESG considerations, while cautioning that the distinct behaviors of liquid and private assets may blur as accessibility increases. The report concludes with expectations for continued demand for private assets in the coming years.