Private Markets Alert Newsletter

✍️ Op-Ed: Navigating Regulatory Crosswinds in Private Markets

The private markets landscape stands at a critical juncture as policy shifts and regulatory scrutiny reshape the industry's trajectory. The Trump administration's evolving approach to private credit regulation signals a potential departure from enhanced disclosure requirements, with expectations that the focus will shift toward capital formation and expanding retail investor access. This regulatory recalibration comes as the Financial Stability Board warns that the rapid expansion of private credit warrants close monitoring for systemic risks, creating a tension between growth ambitions and prudential oversight.

Simultaneously, US bank regulators eased Obama-era leveraged lending guidelines, acknowledging that overly restrictive rules pushed much lending to nonbanks. This delicate balancing act – fostering innovation while safeguarding stability – will define the sector's evolution through 2026. As industry leaders navigate these crosswinds, the winners will be those who combine operational excellence with proactive engagement on policy frameworks that protect both investors and the broader financial system.

🤝 Top Deals

Exit Market Shows Second Year of Recovery

The private equity exit environment demonstrated renewed momentum, with US firms on track to complete more exits in 2025 than the previous year. Through October, buyout firms achieved 1,300 exits worth an estimated $621.7 billion, compared to 1,369 exits totaling $379.6 billion across all of 2024. Deal activity accelerated notably in the third quarter, reaching levels not seen since late 2021. However, challenges persist as the median hold period continues trending higher at 3.9 years versus three years in 2022, with approximately 30% of private equity-backed assets now seven years or older.

Capital Group-KKR Partnership Expands

In a significant development for retail access to private markets, Capital Group announced an expanded strategic partnership with KKR to deliver integrated retirement and wealth solutions. The firms will exclusively collaborate on target date funds for defined contribution plans and public-private model portfolios, building on their successful launch of two co-branded credit strategies. The Capital Group KKR Core Plus+ and Multi-Sector+ funds, which allocate roughly 40% to private credit including direct lending and asset-backed debt, have already raised over $500 million with fee structures deliberately tuned for retail at 0.84% to 0.89% with no performance fees.

Ultra-High Net Worth Investors Pivot Strategy

Nearly a third of billionaires surveyed by UBS plan to reduce private equity fund commitments over the next twelve months, marking the biggest expected decline across investment categories. With higher borrowing costs squeezing deal profits and shrinking payouts to limited partners, ultra-wealthy investors are increasingly favoring direct deals that provide greater control. This shift coincides with more than 18,000 private capital funds simultaneously seeking new commitments, creating roughly $3 of demand for every $1 of supply according to Bain & Company analysis.

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