FUNDRAISING NEWS | October 23, 2024
J.P. Morgan Asset Management sees private markets and artificial intelligence (AI) taking on increasingly important roles in shaping the future of investment strategies and projects outperformance in private equity and real estate relative to other asset classes in 2025.
In its newly released 2025 Long-Term Capital Market Assumptions (LTCMAs), which attempts to provide a comprehensive 10-15 year outlook for returns and risks across asset classes, the firm said it expects private equity to deliver a robust return of 9.9% in 2025, benefitting from favorable exit environments and heightened growth opportunities driven by technological adoption and capital spending. Similarly, private debt returns are projected to be strong, with expectations of 6.3% as investors turn to this asset class for its protective characteristics amidst economic uncertainty.
Real estate also shows promising prospects, with US core real estate anticipated to return 8.1%, marking an increase from the previous year due to attractive entry points and increased yields. In comparison, infrastructure investments are expected to yield around 6.3%, highlighting their stable return potential in an increasingly volatile market.
This report reflects a clear trend among North American institutional investors, with 73% currently engaged in private markets and an emphasis on private equity and debt for future allocations. The integration of AI into investment processes is also gaining traction, with 59% of institutions expressing a positive sentiment toward its application, particularly in investment research and portfolio construction.
Access the full report here.
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