Private Market Review is a free newsletter for the smartest GPs, LPs and Allocators to keep tabs on the growing universe of alts, and the rotation to private capital markets.

Most Interesting Headlines 📰

• Apollo’s Rowan calls out competitors who won’t trade private assets. They like to keep things private, to justify those fees.

• Carlyle bolstered by private credit and secondary trends. The big AUM themes get bigger.

• Private credit goes big on open-ended funds to lure retail cash. GPs want retail money, and retail likes liquidity (and is perhaps less attentive to fees).

• Candidate for NY Comptroller wants to abandon Wall St. Alts. Fighting words.

• How one big PE fund makes its numbers incomprehensible.

Even more private credit

80% of surveyed LPs intend to increase allocations to Direct Lending:

Why it matters:

• Private Credit has, and continues to be, the belle of the ball

• It’s got yield, narrative, and structural tailwinds, and LPs apparently cannot get enough

• More flows mean even more pressure to find yield, however, and competition is already hot

LPs like liquid strategies, but they’re down on active discretionary, and real estate is the pits, which leaves private credit, almost by default. How much can actually be financed (on a risk-adjusted basis), while still maintaining a pricing premium on bank lending remains to be seen, but for now, LPs cannot get enough. So they say, at least.

Rent CAGR Revised Downwards

CBRE’s 5-year multifamily rent CAGR got substantial downward revisions

Why it matters:

• Rent growth for every major market (but three) is now expected to be lower than before—SF, LA, and Orange County were the only exceptions;

• That CBRE expects lower rents, despite a slowdown on starts, reflects the fundamental supply-demand challenges of historically high deliveries of new inventory, with slowing population (and wage) growth;

• Tough news for Real Estate strategies, already struggling to raise new funds

The ‘Housing Shortage’ narrative is running out of steam, as it runs headlong into reality. Developers built and delivered record-breaking amounts of new inventory, just as population growth rolls over, and wage-growth inches closer to the status quo ante. ‘Just build more people hives’ worked for a while, but real estate development is going to be a bit trickier going forward (and higher capital, labor and goods costs, won’t help a bit).

Active ETFs Steadily Gain Share

Active (and passive) ETFs are rapidly making active mutual funds a dying breed, with mutual funds losing ~20% of share over the past decade:

Why it matters:

• ETFs have massive cost and tax advantages, relative to mutual funds, and investors are noticing;

• Active ETFs, in particular, offer a rejoinder to the ‘passives are swallowing price discovery’ claim;

• Slowly, slowly, slowly, and then quickly all at once: once the infrastructure is built, launching active ETFs gets progressively easier, and since they benefit with scale, flows will only increase.

It’s the end of an era for one of the great ‘democratizing’ innovations of all time. ETFs took mutual funds, and made them better, even if there’s an argument that barriers to entry are perhaps a bit too low. The real question is what impact active ETFs will have on already beleaguered active discretionary hedge fund managers . . .

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Investment Idea 💡

Gold! Making the case for allocating to the GOAT of precious metals.

Strategy, Trends & Analysis 📈

Only the smart stuff

• VC Roll-ups: does the math make sense? Some skepticism on the hot new thing in VC (i.e. being more like PE).

• OakTree Market Commentary ‘Still Special?’ US markets are still the best, for lack of better alternatives

• Power draw by data centers expected to double by 2028. Seems like a lot.

• Small multifamily asset prices continue steady growth. It’s that sweetspot of 1-4 units. Not quite a single family home, but not quite a multifamily tower, either.

• Drawdowns and Recoveries. Mauboussin’s latest.

Charts, Data & Decks📊

• CBRE 2025 Real Estate Outlook Midyear Review

• Private Credit Trends

• Manager Performance Score League Tables

• Evercore H1 Secondary Market Report