A Virtuous Cycle Takes Shape
by Joe Zidle, Chief Investment Strategist, Private Wealth Solutions
I keep a fun book on my desk: “Wrong: the Biggest Mistakes and Miscalculations Ever Made by People Who Should Have Known Better”. I browsed through it recently, seeking reassurance for my 2023 recession call. I take some solace in that last year presented a remarkable tale of economic resilience. Defying the looming shadow of rising interest rates, the economy didn’t merely stabilize—it accelerated.
In 2024, the debate about a hard, soft, or non-existent landing should reach a resolution. With real rates (adjusted for inflation) positive for about a year and the depletion of excess savings in household balance sheets, the economy’s now feeling the full impact of the Fed’s policies. Indicators such as the yield curve, Institute for Supply Management surveys, and Purchasing Managers Indices point towards a growth slowdown, the extent of which we should better understand by the second half.
We believe that 2024 could mark the end of the COVID-era recovery, with the U.S. economy emerging from a liquidity trap, a pivotal shift that not only redefines our current economic understanding but also alters our future expectations.
PRIVATE MARKET LENS
Insights from Blackstone Portfolio Companies
by Prakash Melwani, Global Chief Investment Officer, Private Equity
Many pandemic-era distortions have faded, based on Blackstone’s survey of CEOs at its corporate private equity portfolio companies. High interest rates and slowing growth still rank high among respondents, but most don’t see recession in 2024.
Private Equity in a Changing Landscape
by Joseph Baratta, Global Head of Private Equity
Christopher James, Chief Operating Officer of Tactical Opportunities, Chairperson of Blackstone Private Equity Strategies (BXPE)
The opportunity set in private equity appears especially attractive in this higher-cost-of-capital market environment, but only when managers can really focus on what’s critical to driving returns under these conditions.
FROM INSIGHTS TO PRACTICE
Challenging Times Require More Tools
by Anders Nielsen, Managing Director, Private Wealth Solutions
In an era of higher average interest rates, where can investors find the tools and key asset classes they need for such strategic allocations?
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