Deep Dive: Market turbulence highlights diversification role of private markets

Private credit and real assets

In the current environment of high inflation, high rates and slowing growth, diversifying portfolios with private market strategies such as real assets, private credit and secondaries can help investors navigate market turbulence, experts have told Investment Week.

As companies stay private for longer, more investors are looking to enhance portfolio diversification by allocating to private markets, which can achieve risk-adjusted returns with low correlation to traditional assets and reduced volatility. Due to their long-term nature, prevailing macroeconomic conditions are less relevant to private markets, compared to investing in public markets. According to Anna Barath, head of fund investments at Bite Investments, a strategic asset allocation that includes private markets can help steady portfolio returns whatever the weather.  However, do...