At our annual meeting last month in Miami, we shared our latest annual market update and presented our views on the current macro environment and the state of the alternatives ecosystem. Now, we are excited to share a condensed version of that update in our Q3 2024 Keystone Market Update. This update provides timely, data-driven perspectives on the state of the private markets business, including our 'NOWCASTS' of near-term cash flow and valuation trends.
There are multiple competing narratives at play in the current macro landscape. While US equity valuations remain historically expensive and geopolitical uncertainty is increasing, the Fed appears to have achieved a soft landing, with ample room to ease heading into 2025. Strong growth and an accommodative Fed have driven strong equity returns year-to-date. While this has alleviated some of the “denominator” constraints caused during the 2022 downturn, we still believe PE NAVs are, on average, overvalued, which is prolonging the slowdown in distributions – the lifeblood of private markets activity.
In response, GPs are using creative strategies to manufacture liquidity for LPs, but this has not been enough to rejuvenate the historically challenging fundraising market. In the report, we explore the implications of the current macro and private markets environment and provide takeaways and recommendations for both GPs and LPs on how to navigate the current landscape.
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.