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AMA: THE IMPACT OF RATE CUTS ON PRIVATE MARKETS

4 MIN WATCH

October 10, 2024

AMA: The impact of rate cuts on private markets

Matt Malone - Head of Investment Management, Opto
Private Assets

Key takeaways

  • The Fed's rate cut cycle may lead to an increase in transaction volume and deployment of dry powder, potentially benefiting private equity and real estate as leverage becomes less costly and valuations improve.
  • Private equity could be a key beneficiary of falling rates, while private credit may experience increased competition and potentially lower return expectations due to the abundance of available capital.
  • In commercial real estate, falling rates may not immediately unlock transaction volume, leaving it a lender's market for now, especially as capital raised for real estate strategies remains limited compared to private credit.

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Important disclosures

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