Franklin Templeton Outlook | Big Shifts Create New Investment Opportunities
- Editor
- Dec 28, 2024
- 1 min read
What's New: Franklin Templeton's 2025 outlook reveals a major reset in private market valuations, with secondaries, real estate, and private credit emerging as prime opportunities amid changing market dynamics.
Why It Matters: This market reset is creating what could be the most attractive private market entry points since 2021's peak, with experienced managers gaining unprecedented leverage in deal terms and pricing.
The Big Picture:
Secondaries are becoming a vital market force as institutional investors seek liquidity
Real estate valuations have fallen dramatically, particularly in office properties
Private credit managers are filling crucial lending gaps as traditional banks pull back
By The Numbers:
Private equity outperformed public markets with 15.9% returns over 15 years
Real estate values have dropped up to 40% from peak in some sectors
$550 billion in commercial real estate debt needs refinancing by 2027
Key Trends to Watch:
Interest rates expected to continue falling after Fed's 50bp September cut
Growing dispersion between top and bottom performing funds (4,500+ bp spread)
Shift from "term-taker" to "term-maker" environment for experienced managers
The Bottom Line for Investors: While market dislocations have created compelling opportunities across private markets, manager selection is becoming increasingly critical. The gap between experienced and newer players is widening, making it essential to partner with seasoned managers who have successfully navigated multiple market cycles.
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