As public markets continue to navigate valuation concerns, volatility and macroeconomic uncertainty, private markets have emerged as a compelling potential avenue for long-term portfolio growth and diversification.
With robust momentum across private equity secondaries, private credit and infrastructure investments, the outlook for the rest of 2025 and beyond presents financial advisors with an opportunity to enhance portfolio resilience and performance.
Private equity secondaries
The private equity secondary market has experienced notable expansion, with global transaction volumes increasing by 45% year-over-year in 2024. Evercore Private Capital Advisory reported in January that volumes are projected to exceed US$200 billion in 2025.
Historically, secondaries have demonstrated strong performance during periods of market dislocation, including the Great Financial Crisis of 2008, the 2020 Covid shutdown and the 2022 inflation shock, offering enhanced liquidity, transparency and access to high-quality assets at attractive valuations.
Mid-market transactions are particularly well-positioned for sustained growth. These companies often operate in resilient sectors with strong leadership and regional or national focus. That makes them less susceptible to global trade disruptions.
For investors, this segment offers differentiated opportunities for value creation with reduced competitive pressure.
Private credit
Private credit continues to prove its resilience amid economic uncertainty, offering investors attractive yields and downside protection. Compared to traditional lending channels, private credit provides borrowers with faster execution, flexible terms and typically deeper diligence — attributes that may provide greater certainty and are increasingly valued in today’s environment.
For investors, the asset class delivers an attractive spread premium relative to public markets, enhanced by elevated interest rates and floating rate coupons.
Managers are well-equipped to evaluate and meet the financing needs of mid-market companies, positioning private credit as a strategic component for yield enhancement and portfolio stability.
Private infrastructure
The global infrastructure funding gap presents a significant opportunity for private capital. By 2040, an estimated US$100 trillion will be required to maintain, upgrade and build essential infrastructure worldwide. With governments facing fiscal constraints, private investors are increasingly stepping in to support these critical projects.
Mid-market infrastructure transactions account for nearly 90% of deal volume, underscoring the relevance and scalability of medium-sized infrastructure projects. Key investment themes — including AI, energy transition and decarbonization — are driving demand for modernized infrastructure across geographies.
These themes aren’t just global headlines. They can translate into inflation-linked returns, stable cash flows and exposure to real assets underpinning the AI and energy transitions.
Portfolio integration
For advisors, the question is no longer whether to allocate to private markets, but how to size and structure that allocation effectively. Incorporating private market strategies into client portfolios may deliver meaningful benefits, including improved diversification, reduced volatility and enhanced long-term return potential.
Private markets have historically exhibited smaller drawdowns and stronger recoveries compared to public markets, making them a valuable tool for navigating uncertain environments. Historical data suggests that a balanced exposure, typically 20% to 30% across private equity, private credit and infrastructure can enhance long-term returns while reducing overall volatility.
As the investment landscape continues to evolve, financial advisors are encouraged to consider private markets as a strategic allocation to support portfolio resilience and optimize outcomes for their clients. Private markets have evolved from an alternative to an essential pillar of diversified investing.
Allan Seychuk is vice-president and senior investment director with Mackenzie Investments.