Ungated Post | 09 Feb 2021

Maximizing the Opportunity in Private Markets

In a new white paper The Beneficient Company Group Ltd and Oxford Economics explore how investors can maximize the opportunity in private markets amid a subdued economy and the risks they must navigate in doing so.

Portfolio construction and rebalancing around market cycles is a widely accepted and important approach in public asset management; for similar reasons this approach can benefit alternative asset investors. Many investors in private markets have traditionally relied on fund manager skill, so-called manager selection, rather than looking more holistically at their allocations and diversifying broadly across the private asset class. Yet we know that different private fund strategies tend to outperform in certain economic and market environments; venture capital, for instance, outperformed in the late 1990s but then struggled in the dot-com correction afterwards.

Meanwhile, investing during the next five years is likely to be characterized by low nominal returns and uneven asset performance, while the hardest-hit sectors during the pandemic could benefit from a rebound in valuations. In this paper, we utilize Ben’s portfolio allocation framework customized to private assets to analyze and forecast the risk/reward profile of private fund strategies. In accordance with Oxford Economics’ baseline macroeconomic forecasts, our analysis suggests that private real estate and natural resource funds currently are relatively attractive portfolio overweights. However, stretched equity valuations suggest caution when allocating towards venture capital strategies in the near-term, when the industry is at record levels of investment capital and competition for deals that are priced at significant historical premiums.

Read the full report here

Macro and Investor Services
Our economic consulting and thought leadership teams are world leaders in quantitative economic analysis and original, evidence-based research, working with clients around the globe and across sectors to build models, forecast markets, run extensive surveys, and evaluate interventions using state-of-the-art techniques. Lead consultants on this project were:

Oxford Economics’ team is expert at applying advanced economic tools that provide valuable insights into today’s most pressing business, financial, and policy issues.

To find out more about our capabilities, contact:

EMEA
Graeme Harrison
+44 (0) 289 263 5417
Email

Americas
Michael Kleiman
+1 646 503 3064
Email

Asia
Rhianne Clark
+65 6850 0112
Email

Related Services

Post

De l’opportunité à l’impact – Évaluer les avantages économiques, sociétaux et culturels de YouTube en Belgique

Cette étude évalue la contribution de YouTube au PIB belge et au taux d’emploi en Belgique, ainsi que son impact plus large sur la société et la culture.

Find Out More

Post

Van mogelijkheden naar impact – Beoordeling van de economische, maatschappelijke en culturele voordelen van YouTube in België

Deze studie beoordeelt de bijdrage van YouTube aan het BBP en de tewerkstelling in België alsook de bredere impact op de maatschappij en cultuur.

Find Out More

Post

From opportunity to impact – Assessing the economic, societal, and cultural benefits of YouTube in Belgium

This study assesses YouTube's contribution to GDP and employment in Belgium, and its broader impact on society and culture.

Find Out More