We are pleased to share our Q2 2025 Keystone Market Update, providing real-time insights into private markets alongside our latest ‘Nowcast’ forecasts.
Elevated tariffs and trade tensions have worsened the already dormant exit market and continue to weigh on investor sentiment. As a result, private market performance continues to be constrained. Distribution yields continue to hover near historic lows, with exit activity still limited by a stubborn NAV overhang. LPs are increasingly signaling openness to markdowns or liquidity at a discount to NAV, but GPs have been slow to embrace such moves.
This dynamic has also led to a difficult fundraising environment for many GPs. There is a growing backlog of middle-market managers actively trying to raise capital, and a rising number of firms are simply not returning to market at all. Despite this broader trend, the rise of retail and semi-liquid is in full swing for large/mega-cap managers. We estimate that the largest “Level 10” firms (per our taxonomy) are now 20%+ retail or retail-indexed (via insurance affiliates) in terms of their total economics.
This report unpacks these themes and the implications for GPs and LPs through the rest of 2025.
You can find the full market update here (Password: Arctos1!) or on our private markets research platform, Katmai Labs.
As always, we welcome your feedback and questions.