The Importance of Manager Selection
The Importance of Manager Selection
Across private markets, there is optimism and some positivity as we progress through 2024. After a period in which rates were increased at their fastest pace in decades1, it is likely that we will see rates begin to fall this year. As at the end of March, the Fed were still predicting there would be three rate cuts during 20242. While there is still some uncertainty as to when cuts will begin3, due to inflation remaining stubbornly high and growth remaining solid, a clearer picture is emerging.
As we have said before, investors like clarity4. In our view, 2024 could be a year where investors get the clarity they need to make investment decisions. We are likely to see greater clarity around the macro-outlook and this could provide conditions for recent fund vintages to potentially be good performers. Should it evolve this way, investors might be able to take advantage of lower asset prices in some markets, balance sheet restructuring and discounts in secondary markets. Already, there are signs that activity could be bottoming out in some markets and accelerating in others.
Read our paper to find out more.
1. Federal Funds Effective Rate (FEDFUNDS) | FRED | St. Louis Fed as of March 2024.2. Fed Meeting March 2024: Key Takeaways From Rate Decision and Updated Forecasts – Bloomberg as of March 2024.
3. Fed to cut US rates in June, risks skewed towards later move: Reuters poll | Reuters as of February 2024.
4. Why alternatives are still relevant, HSBC Asset Management as of February 2024.