We are excited to share our Q2 2024 Keystone Market Update. Our update provides real-time, quantitative perspectives on the state of the private markets business, including our 'NOWCASTS' of near-term cash flow and valuation trends.
Following a sustained rebound in public equities, the dominant narrative in private markets has shifted from the "denominator" issues caused by public market volatility to the "numerator" problem caused by a historic backlog of unrealized value. This backlog is the result of a historically low distribution environment, further straining fundraising. In this update, we revisit our public-private proxy and zoom in on the valuation of unrealized assets to better understand where we are today, and what may be needed before we see an uptick in exit activity.
We also highlight the recent outperformance of Private Credit strategies and explore the implications of a "higher for longer" interest rate environment, where LPs can find compelling returns without venturing far out on the risk curve. The decade of the "search for yield" may be over, and we expect this will have implications for both LPs and GPs in the years to come.
We hope you find this helpful and welcome any feedback or reactions.
You can find the piece here (Password: Arctos1!). Please reach out with any questions.