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The Case Against Private Markets

Who are we fooling with stale valuations? 

Nicolas Rabener
10 min read
13 May 2024

SUMMARY

  • There can be large discrepancies between private and public market valuations
  • Blackstone’s Real Estate Income Trust (BREIT) seems to have been immune to the downturn in property markets
  • It is difficult to explain this except by stale valuations, which represents significant downside risk

INTRODUCTION

Alternative asset classes like private equity have exhibited strong asset growth as institutions have increased their allocations consistently since the global financial crisis in 2009, attracted by strong and consistent returns. Lately, even financial advisors and retail investors have gotten access to such strategies via dedicated wealth tech platforms such as iCapital in the U.S. and Moonfare in Europe.

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