Link to original article: Q1 2023 – Quantitative Perspectives: US Market Insights
This report was reuploaded on February 27, 2023, to update a typo on page 70.
How alternative assets are stacking up amid US recession fears
An expanding US economy in H2 2022 was met with geopolitical strife, hawkish central banks and a growth hangover, to say the least. But alternative asset investing churned on.
Through the tumult of last year, assets under management in private markets dipped, according to PitchBook projections. Our latest Quantitative Perspectives report, with 70-plus pages of insights into the US private markets, uses our capital recycling framework to predict where that growth will lead in the short and long term.
Key takeaways:
- We forecast that private market AUM will shrink in 2023, then rebound over a four-year period, sliding into 2027 with $13 trillion under management in VC, PE, private debt, real estate and real assets.
- Our recession model continues to predict a downturn is more likely than not, and if the Fed can thread the needle, a soft landing is possible.
- VC funds should gain more bargaining power while negotiating term sheets. Startups’ demand for new capital has climbed dramatically—virtually doubling to $80 billion in two years—so they will have to work harder to attract capital.