Why Now for Private Equity?

A timely question 

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The only certain thing about the market is uncertainty. Distributions have remained slow in 2025 despite predictions that prevailed at the beginning of the year,1 and valuations of mature funds look a bit stretched, resulting in more discussion around private market valuation policies. Thus, instincts to hesitate around new allocations to private equity (PE) are understandable. The question of how to time PE investments also opens a broader one: what does “now” really mean in an asset class that takes years to deploy and even longer to realize? 

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Current environment paradoxically presents opportunities 

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Today’s environment is one where capital scarcity is returning. Fundraising for PE funds has been much slower since 2022, deal competition has thinned, and entry valuations are more disciplined.2 UBS calls 2025 an "attractive vintage",3 Franklin Templeton suggests that 2025 is a new dawn for private markets with the best opportunities in less crowded areas of the market,4 and BlackRock sees portfolios of the future built increasingly around private markets overlapping with public listings.5 

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“The current mix of slower fundraising, tighter capital availability and more selective LP commitments is creating a less crowded and less competitive field for PE sponsors. Based on the capital raised at recent fund closings and investment pacing patterns, it is reasonable to expect that weaker managers may struggle to raise follow-on vehicles, which could leave better-capitalized firms with greater flexibility to invest into today’s pricing environment. We see this period as one that will reward operational value creation, sophisticated and appropriately incentivized management teams, and careful portfolio management, rather than reliance on leverage or valuation momentum.” – Matthew Chapman, Partner. 

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How institutional allocators think about “when” 

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Even with this potentially favorable setup, timing is still difficult for most investors. Large institutions such as Stanford, CPP Investments and Australia’s Future Fund are known for investing through each market cycle. Many investors can trace their approach to Swensen’s endowment framework, which he developed during his tenure at Yale. The approach focuses on building exposure consistently across vintages, recognizing that while any single year may underperform, long-term disciplined vintage diversification reduces reliance on timing. 

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Family offices and other ultra-high net worth investors may think differently, dividing capital into buckets: near-term liquidity for spending or trading, medium-term allocations for income, and long-term capital intended to grow. Within that structure, PE belongs in the long-term growth bucket as capital designed to compound over years rather than months. We believe maintaining a consistent commitment to that bucket helps prevent gaps in future distributions and avoids missing the vintage years that may ultimately prove to be most valuable. 

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Balancing alpha and beta 

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For active investors who back individual deals or specialist managers, those high-conviction positions remain essential for generating alpha. Alongside this, diversified PE programs may help investors gain broad exposure to the asset class, and support a core-satellite approach where high-conviction risks may be balanced with a foundational lower-risk core. These programs can offer broad exposure to the anticipated return premium of private markets, combining illiquidity premium and operational control, while also offering data driven insights into asset class trends and performance. 

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Concentrated alpha captures opportunities where an investor believes they have insight. Steady, diversified asset class exposure compounds through cycles. The balance between the two depends on liquidity preference and risk appetite rather than attempts to time the market, and there is an important role for both in investor portfolios. 

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The takeaway 

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In short, asking “why now” is the right instinct, but we believe the rationale for building a steady exposure to PE remains the same as it has historically. 

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“Our opinion is that cyclically, the backdrop is improving: less competition, better pricing, and healthier forward returns. Structurally, the rationale for consistent, formulaic commitment remains sound. For investors willing to set aside liquidity and let capital compound through the next cycle, 2025–2026 could be a good vintage to commit to new primary private PE and other private capital funds.” – Edward Talmor-Gera, Founder and CEO

1. Adams Street, “2025 Global Investor Survey: Navigating Private Markets,” March 2025 
2. McKinsey, “Global Private Markets Report 2025: Braced for shifting weather,” May 2025 
3. UBS “Private Markets Extended: 2Q25 Outlook,” May 2025 
4. Franklin Templeton Institutional “Private Markets Outlook 2025,” December 2024 
5. BlackRock Investment Institute “Global Outlook in Charts (Q4 Update),” October 2025  

The information herein has been presented for illustrative purposes only and is based on NewVest’s subjective beliefs and, among other things, current market conditions, all of which are subject to a variety of assumptions and risks that may prove to be inaccurate and therefore should not be viewed as predictions of future outcomes. In addition, certain information has been obtained from third parties and there can be no assurance that any estimates, illustrations and/or projections provided by third parties, including with respect to investor investment allocations and other views related to the private markets, will ultimately prove to be accurate. While NewVest believes such third-party sources to be reliable, it has not undertaken any independent review of such information and, therefore, does not make any representation or warranty, express or implied, with respect to the fairness, correctness, accuracy, reasonableness or completeness of any of the information contained herein (including but not limited to economic, market or other information obtained from third parties), and it expressly disclaims any responsibility or liability therefore.