Key Takeaways
- • JP Morgan Asset Management's 2025 Global Alternatives Outlook, its seventh edition and 28 pages long, argues that a diversified alternatives portfolio is increasingly important across a 12- to 18-month horizon.
- • The manager expects private credit to keep taking market share in 2025, supported by robust US growth and a deregulatory agenda that could benefit both public and private lending.
- • Higher interest rates may pressure lower-quality borrowers while opening opportunities for distressed and special situations credit strategies.
- • Secondaries are cited as an efficient route into private equity and private credit, helping investors mitigate J-curve and blind pool risks.
- • JP Morgan oversees more than $400bn (£321bn) in alternative assets, and says alternatives are becoming more accessible to individual investors through private wealth channels.
Summary
JP Morgan Asset Management has highlighted the value of a diversified alternatives portfolio as part of its 12- to 18-month outlook across asset classes, published in its 28-page Global Alternatives Outlook, the seventh edition of the report. The manager expects private credit to continue capturing market share throughout 2025, with a robust US growth environment and deregulatory agenda likely to support both public and private lending. Higher interest rates could pressure lower-quality borrowers but also create opportunities for distressed and special situations credit strategies.
The report points to secondaries as an efficient means of gaining access to private equity and private credit activity, allowing investors to capitalise on growth-oriented companies while mitigating J-curve and blind pool risks. Real estate is positioned as a source of potential inflation protection through rent increases and property revenue growth, while infrastructure and transport assets are described as well-positioned to provide inflation protection as supply chains are reconfigured and trade agreements evolve.
JP Morgan also highlighted the expansion of alternatives into the private wealth market, which has driven a rise in semi-liquid structures that typically rely on secondaries to source liquidity. The report cites "broad market volatility and decades-high inflation" over the first half of the decade, and argues that limiting portfolio diversification to traditional assets presents challenges.
Jed Laskowitz, global head of private markets and customised solutions, said the outlook leverages the firm's more than 50-year track record as a private markets investor and comes as many investors evaluate their alternatives allocations. With the US economy in a mid-to-late cycle stage, he said private markets present potential opportunities for enhanced returns versus public markets, inflation protection, and diversification benefits. Anton Pil, global head of alternatives solutions, cited high valuations, positive stock-bond correlations and persistent rate volatility as headwinds for traditional portfolios, arguing that the case for alternatives is increasingly compelling. JP Morgan oversees more than $400bn (£321bn) in alternative assets.
The report points to secondaries as an efficient means of gaining access to private equity and private credit activity, allowing investors to capitalise on growth-oriented companies while mitigating J-curve and blind pool risks. Real estate is positioned as a source of potential inflation protection through rent increases and property revenue growth, while infrastructure and transport assets are described as well-positioned to provide inflation protection as supply chains are reconfigured and trade agreements evolve.
JP Morgan also highlighted the expansion of alternatives into the private wealth market, which has driven a rise in semi-liquid structures that typically rely on secondaries to source liquidity. The report cites "broad market volatility and decades-high inflation" over the first half of the decade, and argues that limiting portfolio diversification to traditional assets presents challenges.
Jed Laskowitz, global head of private markets and customised solutions, said the outlook leverages the firm's more than 50-year track record as a private markets investor and comes as many investors evaluate their alternatives allocations. With the US economy in a mid-to-late cycle stage, he said private markets present potential opportunities for enhanced returns versus public markets, inflation protection, and diversification benefits. Anton Pil, global head of alternatives solutions, cited high valuations, positive stock-bond correlations and persistent rate volatility as headwinds for traditional portfolios, arguing that the case for alternatives is increasingly compelling. JP Morgan oversees more than $400bn (£321bn) in alternative assets.
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