The 2025 Private Markets Macro Outlook: Decarbonise, Digitise, Deglobalise
Outlook for 2025
Despite public markets having closed out 2024 near all-time highs, investors continue to face a number of uncertainties – most notably, the war in Ukraine and the ongoing conflict in the Middle East – that will impact global economic growth and investment opportunities in a range of ways.
Additionally, we are yet to fully understand what priorities President-elect Donald Trump will have upon his inauguration in January, but judging from his previous term and the Trump campaign’s messages, we can make some predictions. A major question for many investors is whether the outgoing President Joe Biden’s landmark Inflation Reduction Act (IRA), which offered billions in climate and clean energy subsidies, will be dismantled or altered.
We expect it is likely to be adjusted, pared back and, in some cases, rebranded. However, Trump’s incoming administration has offered up views on federal funding for EVs, clean electricity and sustainable aviation fuel, and the outcomes achieved through the IRA have received bipartisan support, especially where projects have created jobs in areas heavily impacted by de-industrialisation.
The prevailing geopolitical risk informing most investment decisions will remain a consideration in 2025 regardless of investment destination, although these risks can be countered by allocations to countries understood to have established institutions and strong rule of law.
Infrastructure Equity by Julio Garcia
The end of 2024 saw inflation trending downwards in most advanced economies and gradually approaching central bank target bands. This offers central banks the opportunity to cut rates, albeit with some caution given potential inflationary risks. More certainty in the rates environment is expected to further support a deal market that is closer to equilibrium.
Infrastructure Debt by Rich Randall
In infrastructure debt, similar themes will play a crucial role in 2025 as those in mind for infrastructure equity investors.
Diversified Credit by Lillian Nunez and Hiran Wanigasekera
We enter 2025 with an environment for private credit that is much more attractive than many would have expected even 12 months ago. At the end of 2023 and during the early months of 2024, we were seeing interest rates rise and remain higher than initially forecast in an effort to address inflation, and many in the market were uncertain as to whether Australia would be able to execute a soft landing, instead anticipating a recession.
Private Equity by Stuart Wardman-Browne
The Australia-New Zealand market has long been attractive for private equity investment. Data from the Burgiss Private IQ database highlights that Australia has outperformed the US by around 70% since 2000.
For more, please read the full Private Markets Macro Outlook.
Meet the authors
Alex Joiner
Alex Joiner is Chief Economist at IFM Investors. He is responsible for the firm’s economic, financial market and geopolitical risk analysis that is key in IFM’s investment process. In this capacity he engages with IFM’s domestic and global clients on macro-investment trends and themes.
Julio Garcia
Julio is responsible for IFM Investors’ infrastructure investment business in North America and manages the New York Infrastructure Team. Julio is also a member of the Infrastructure Investment Sub-Committee.
Hiran Wanigasekera
Hiran is an Executive Director and Co-Head of IFM Investors' Australian Diversified Credit capability. He responsible for joint management of key credit portfolios, credit product strategies and managing the day-to-day running of debt portfolios. Hiran has worked across a wide range of credit sectors and industries including bank lending, corporate credit and structured investments.
Lillian Nunez
Lillian is an Executive Director and Co-Head of IFM Investors' Australian Diversified Credit capability. She is responsible for joint management of key credit portfolios and credit product strategies. She also heads the team responsible for conducting credit analysis, due diligence, investment recommendations and portfolio asset management support to the Debt Investments Team.
Rich Randall
Rich is responsible for the creation and management of IFM Investors’ debt investments strategies and portfolios, and for the debt investments team globally. He also heads IFM Investors’ North American debt investment business. Based in New York, Rich has more than 20 years of experience in originating, analysing, structuring and arranging debt facilities for large infrastructure projects.
Stuart Wardman-Browne
Stuart is Global Head of Private Equity, responsible for Private Equity fund raising as well as sourcing, structuring and negotiating new investments. Stuart has extensive experience in Private Equity investment management, with a long investment track record, extensive networks and proven execution capabilities.
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