Capital Monitor

For a growing number of investors, private markets have a strong pull, as they seek out new ways to maximize returns. As an alternative to the familiar, on-exchange, public markets, they offer access to an enticing array of assets – private equity, private credit, infrastructure, natural resources, real estate and more – all offering diversification and the potential to deliver superior risk-adjusted returns.

We live in times of great change, and the global economic landscape is more closely intertwined than ever. Not only do global shocks such as the pandemic and the impending effects of climate change cast long shadows, but the effects of local or regional factors are felt around the world like never before.

Improving and preserving biodiversity is essential to our existence: human life on Earth needs a thriving global ecosystem to survive. Not only does restoring nature help lower global temperatures, but it also ensures farms can continue to provide crops. In addition, healthy ecosystems help prevent the spread of disease.

Around the world, investors are looking for productive, profitable places for their money – and many are turning to private markets. This is being driven by a combination of factors. Not least among them is the fact that changes in public policy legislation are shifting investment flows and opening up new opportunities.

Global investment in the low-carbon energy transition stood at an all-time high of $1.1trn in 2022. Maintaining an upward trajectory in the face of challenges such as the ongoing war in Ukraine, spiralling inflation, and growing politicisation of the ESG space, made this a particularly welcome milestone, demonstrating the growing robustness of sustainable investing.

Private credit, or non-bank direct lending to private companies, is a rapidly growing asset class. Investors manage  $1.5trn globally in private credit, . The asset class has tripled in assets under management (AUM) since 2012, and it’s becoming more attractive to new types of investors. But it also poses unique challenges for asset managers and institutional investors.

Improving and preserving biodiversity is essential to our existence: human life on Earth needs a thriving global ecosystem to survive. Not only does restoring nature help lower global temperatures, but it also ensures farms can continue to provide crops. In addition, healthy ecosystems help prevent the spread of disease.

The UK has always been a prime location for investment. Global businesses invest here for many reasons such as stability, commercial openness, and financial services credentials. With the UK’s renewed status as an independent trading nation, our offer is stronger than ever. Invest in the UK and join the world’s fifth-largest economy with over 67 million potential customers, a top-calibre workforce of around 32 million, and per capita consumer spending that outstrips the rest of Europe by 30%.

A recent US policy announcement is a sharp reminder of how crucial America is to global energy supply, and the geopolitics that surround it. On 26 January, Joe Biden declared a “temporary pause” on pending decisions regarding US exports of liquefied natural gas, or LNG. These exports were the reason Europe was able to stop importing Russian gas without widespread shortages and blackouts, and they remain fundamental to Europe’s energy security.

Catalysed by a landmark UN Intergovernmental Panel on Climate Change (IPCC) and bold policies such as the UK’s net zero 2050 target (which became law in 2019), 2020 was the year that net zero went mainstream.