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RESEARCH • November 2024
Private Market Opportunities:
The Case for Real Estate Debt.
Private markets have experienced explosive growth over the last two decades.
In this short paper we examine why this growth has happened, explain some of the characteristics that continue to prove so appealing for investors and explore whether now is an attractive entry point for real estate debt.
Private markets describe a broad range of equity and debt investment strategies that are not publicly traded or listed. They offer investors a vast array of styles and sectors, from the well-publicised mega Private Equity funds, to the smallest micro financing opportunities in emerging markets.
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Within the private debt subset of this family, corporate credit, real estate and infrastructure are the largest underlying sectors. In absolute size, private markets are still significantly smaller than public markets, although their growth has greatly exceeded that of public markets over the last decade.
Private debt accounts for approx. 12% of total private markets AUM and has grown at circa 14% p.a. since the global financial crisis (2008). Forecasts predict growth to continue, estimating the sector will at least double in size over the next five years, an astonishing increase of over $1.9Tn!
