BlackRock Outlook | Brightest days ahead for private markets
- Editor
- Dec 30, 2024
- 2 min read
What's new: BlackRock projects private markets will grow from $13 trillion today to over $20 trillion by 2030, driven by rising allocations across all client segments and rapid expansion in private credit and infrastructure.
Why it matters: After a challenging period marked by rising rates and slower deal activity, private markets are entering a new growth phase with improved exit opportunities, lower financing costs, and increasing demand for long-term capital.
The big picture: Four key drivers are reshaping private markets:
Growing wealth allocations: Individual investors and defined contribution plans are just beginning to access private markets, with current allocations of only 1-2%
Infrastructure and private credit leading: These sectors will grow from 20% to 30% of private markets by 2030, fueled by bank deleveraging and major infrastructure needs
Industry consolidation accelerating: The top six private markets firms captured 63% of flows in 2024's first half, up from 22% in 2019
Increased transparency coming: As allocations grow, investors demand better data for decision-making, pushing firms to improve reporting and analytics
By the numbers:
Private markets projected to reach $29 trillion by 2033
Energy investment expected to rise from $2.2T to over $3T by decade's end
82% of PE buyout companies are profitable vs 46% in Russell 2000 Index
Key trends to watch:
AI driving massive data center and power infrastructure needs
Private credit expanding into $5.5T asset-backed finance market
Real estate valuations showing early signs of bottoming
Middle-market buyouts positioned for increased activity
The bottom line: While private markets face a structurally higher cost of capital compared to the post-financial crisis era, BlackRock sees the "brightest days ahead" as investors increasingly seek long-dated, profitable assets to match their liabilities.
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