Vol 22 (2025) - Issue 1

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What Does Increased Liquidity after Higher Rates Mean for Investors in Private Markets?

Synopsis
With rising financing costs, and uncertain outlook on fundraising and deal activity, private markets had entered a more subdued environment in 2023. Then central banks began interest rate cutting in 2024, indicating potentially improving liquidity conditions, including for private markets. This is posed to continue despite the US Fed already reducing pace of cuts. To be clear, there has been – and continues to be – liquidity constraints impacting investors in the private market resulting from the past years. How did we get here, and what does the outlook hold?