Co-CEO Juan Delgado and head of EMEA Richard Hope at Pennsylvania-headquartered Hamilton Lane, a US private markets investment management firm, share their insights for private markets in 2025 and investment opportunities, after US President Donald Trump imposed significant tariffs on US imports.

Despite the 90-day pause in tariffs and new trade deals announced by US President Donald Trump, co-CEO Juan Delgado at Hamilton Lane expects tariffs to have an inflationary effect, growth to be impacted, and consumer sentiment to be down in 2025. He spoke alongside Richard Hope, head of EMEA at the Pennsylvania-headquartered firm.

Delgado, speaking at a media event in London this week, highlighted how private equity-backed firms have proved to be resilient under stress and work well in uncertain, volatile times.

“While the US Federal Reserve may have engineered a soft landing before the recent trade policy changes, tariffs are expected to cause higher inflation in both the short and long term,” Delgado said. “Consumer sentiment is down and a majority of consumers expect business conditions to worsen over the next year. In addition to the consumer and inflationary impact, tariffs will likely have an impact on GDP growth. The degree of impact is dependent upon the level of escalation by the rest of the world in response. The US dollar has also dropped significantly since the start of the new trade policy.”

Like many wealth management houses, Hamilton Lane is wrestling with how to set asset allocation amidst volatility in the global economy, with uncertainties over trade policy being a particular concern. On a more positive note, there has been a groundswell of commentary and fundraisings in recent months and years relating to private market funds and areas such as "evergreen," aka "perpetual" fund structures as ways to enter the market. (These are open-ended funds, with pre-set liquidity, and no hard exits and capital calls, as is the case with traditional closed-ended private equity and private credit funds.)

Private markets
Hope, meanwhile, highlighted that historically, during times of crisis, private equity funds have had shallower drawdowns and quicker recoveries. Private-equity backed firms tend to be more resilient under stress and in uncertain, volatile times.

“The greatest outperformance for private markets historically happens in the years following either very low or very high volatility in the public markets. Private equity outperformance of public markets tends to be at its greatest level during periods of mediocre or negative public market returns,” Hamza Azeem, evergreen portfolio management managing director at Hamilton Lane, said at the same briefing.

Credit has outperformed leveraged loans in each of the past 23 vintage years. Both infrastructure and real estate have outperformed in all vintage years since 2012, except in 2022 for real estate. And Hope highlighted that there are investment opportunities for secondaries and senior private credit in 2025. Infrastructure will also continue to perform well this year, after strong performance in 2024.

“Nevertheless, deal activity across all private markets is continuing to be sluggish compared with the levels seen in 2021 and 2022. Valuations remain elevated, with private markets now more expensive on average than public markets,” Hope said. Fundraising also dropped again in 2024, with numbers that are now on par with what the industry was raising in 2016. He expects fundraising to remain difficult until there is a rebound in exit activity.

Evergreen funds
While traditional private equity might be slowing and continuing along that path, the growth of the wider private equity market is continuing through other avenues. “Evergreen-structured funds have exploded as a way to allow investors to experience private equity growth rates, without the traditional drawbacks of illiquidity and long drawdown periods,” Azeem said at the event.

Evergreen funds currently account for about 5 per cent of the overall private markets’ share, which is nearly $700 billion. “To reach a 20 per cent market share, evergreen funds would need to grow at an annual rate of 30 per cent, outpacing the overall private markets’ historic 11 per cent annual growth. If all high net worth individuals allocated 5 to 6 per cent to evergreens over the next 10 years, evergreen funds would be able to hit their target of 20 per cent by 2034,” Azeem added.

Evergreen aka perpetual funds are gaining ground. BNP Paribas Asset Management, for example, has also pushed into this area. “Perpetual” is a term describing a structure of funds that doesn’t come with the drawdowns, capital calls, exit deadlines and other traditional features of private market entities. They don’t carry the kind of liquidity constraints that might be a problem for investors in more established fund structures.

Dealing specifically with private markets investing for more than 30 years, Hamilton Lane employs about 740 professionals operating in offices throughout North America, Europe, Asia Pacific and the Middle East, with $956 billion in assets under management and supervision.