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Interest-rate cuts expected to send money into private assets

Joan Ng

Joan Ng

Published Tue, Feb 27, 2024 · 08:50 PM
    • Market data shows private equity and private credit have significantly outperformed traditional asset classes in recent years.
    • Market data shows private equity and private credit have significantly outperformed traditional asset classes in recent years. ILLUSTRATION: SIMON ANG, BT

    CUTS in interest rates should push investors out of the comfort of money-market funds and government bonds and into riskier products, including private assets, market watchers said.

    Even as central banks around the world cut interest rates to stimulate their economies, however, rates are unlikely to fall to the near-zero levels of recent years.

    This higher-for-longer environment means it will be important for private-asset investors to pick good managers who can deliver value without relying heavily on leverage.

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