In a recent ION Influencers fireside chat, Shannon Saccocia, Chief Investment Officer at Neuberger Berman (NB) Private Wealth, shared invaluable insights on the evolving landscape of private markets, emerging opportunities, and key considerations for investors. Hosted by Giovanni Amodeo, this discussion covered critical trends shaping private equity, private credit, and secondary markets.

Top Takeaways from the Discussion

1. The Rise of Private Markets Over the Last Decade

• Private markets have grown significantly due to regulatory changes post-GFC, reducing traditional bank lending and increasing demand for alternative capital sources.
• Once limited to institutional investors, private markets now attract family offices and high-net-worth individuals due to improved accessibility and innovative structures.

2. Why Investors Should Consider Private Markets

• Diversification & Enhanced Returns: Private markets offer exposure to high-growth opportunities unavailable in public markets.
• Resilience in Changing Cycles: Private credit, for example, has demonstrated flexibility that traditional lenders can’t match.

3. Addressing Concerns Around Private Credit

• While some warn of risks (e.g., Jamie Dimon), Saccocia emphasizes due diligence and manager selection to navigate potential downturns.
• Bifurcation in Quality: Not all private credit is equal—investors must assess underlying risks and borrower quality.

4. The Growing Importance of Secondary Markets

• Liquidity Solutions: With fewer exits in private equity, secondaries and continuation vehicles are gaining traction.
• Institutional & GP-Led Transactions: Both LPs and GPs are driving growth in secondary market activity.

5. Innovation in Private Markets

• New Structures: Semi-liquid and liquid private market vehicles are expanding access.
• Specialization: Asset managers are increasingly focusing on niche strategies (e.g., asset-based lending, restructuring).

6. Manager Selection & Red Flags

• Succession Planning: A strong next-gen leadership pipeline is crucial.
• Operational Strength: Former big-firm managers must prove entrepreneurial skills when launching independent ventures.

7. Most Promising Asset Classes Today

• Private Equity: Despite capital-raising challenges, strong opportunities exist in co-investments and secondaries.
• Public Equities: Still attractive, particularly in sectors benefiting from higher rates and inflation.

Final Thoughts

Private markets continue to evolve, offering unique opportunities for investors willing to embrace illiquidity for higher returns. However, success hinges on strategic manager selection, deep due diligence, and adaptability in an ever-changing financial landscape.
Key timestamps:

00:07 Introduction to Private Markets Trends
01:09 Milestones in Private Markets Over the Last Decade
03:19 Client Perspectives on Asset Classes
04:54 Understanding Macro Shocks and Their Impact
06:40 Concerns Surrounding Private Credit
08:35 Bifurcation in the Asset Management Industry
10:44 Innovation in Investment Management
12:24 Key Components of Manager Selection
13:51 Assessing General Partners and Red Flags
15:37 Succession Planning in Asset Management
16:49 Transitioning from Large Firms to Entrepreneurship
18:19 Hiring Criteria for Investment Teams
19:34 Investment Opportunities in Asset Classes
20:44 Growth in Secondary Markets
21:44 Conclusion and Acknowledgments