2025 Private Markets Outlook and Public Market Implications

Introduction

• Speaker: Steve Brennan (Head of Private Wealth Solutions, Hamilton Lane)
• Topic: Current and future state of private and public markets
• Events: Impact of 2024 US elections and geopolitical changes

Panelists

• Mario Gini: Executive Co-Chairman, Hamilton Lane; former CEO; Private markets industry expert
• Blain Rollins: Managing Director, Hamilton Lane; author of US Weekly research briefing

Key Discussion Points

Convergence of Private and Public Equity

• Trend: Increasing convergence of private and public equities into one asset class
• Reason: Diminishing number of public companies, long-term private status
• Example: OpenAI's $150 billion valuation
• Credit Side: Private credit replacing bank capital, public debt
• Infrastructure: Same trend seen in infrastructure investments
• Investment Vehicles: Rise of Evergreen vehicles, semi-liquid products for wider investor access

Outlook for Public Markets

• Current Status: S&P 500 up 70% from October low
• Valuations: Third or fourth most expensive in 100 years
• Future Gains: Dependent on earnings growth
• Valuation Gap: Large vs. small companies; private buyouts occurring at lower valuations
• Potential M&A: High valuation gap provides M&A opportunities; potential changes due to DOJ and FTC

Importance of Private Equity

• Historical Performance: Private equity outperforms over the long term
• Reasons: Governance model, opportunity set, alignment
• Current Environment: Need for private equity exposure due to diminishing public opportunities

IPO Market and Private Equity

• Current State: IPO market remains shut, significant inflows into mutual funds and ETFs
• Market Dynamics: Valuations may drive private companies to go public
• Example: Standard Aero IPO delivered higher valuations compared to private offers
• Exit Opportunities: Private equity less reliant on IPOs, more on strategic deals

Impact of US Elections

• Public Market Reaction: Positive due to expectations of a less regulated environment
• Potential Changes: Reduced anti-trust restrictions, potential tariff impacts
• Geopolitical Considerations: US-China relations, tariffs, and implications for investors

Global Market Considerations

• Private Equity: European buyouts performing well
• Growth Rates: US may grow faster than Europe
• Asia: Investment challenges in China for US investors
• Infrastructure: Global opportunities with less US dominance

Year-end Investment Recommendations

• Investment Strategy: Maintain focus on returns irrespective of political outcomes
• Private Market Exposure: Increased opportunities and structures make private markets attractive
• Diversification: Importance of a well-diversified portfolio including private markets

Conclusion

• Webinar Summary: Discussion on private markets outlook and public implications
• Acknowledgments: Thanks to panelists and attendees