Partners Group expects a further rebound in private markets activity in the third quarter of 2025 against a backdrop of improved clarity on trade deals, higher tariffs, and a “stronger” Europe.
Anastasia Amoroso, managing director and chief investment strategist, and Fiona Gillespie, private markets economist at Partners Group, said private companies’ strong profit margins and robust earnings growth make them attractive relative to public companies.
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In its private markets chartbook for the third quarter, Amoroso and Gillespie noted that the share of the US’s main trade partners with a signed trade deal had grown steadily, bringing “more clarity” to the trajectory of major global economies in the second half of 2025.
They also forecast that tariffs will weigh on US economic growth in the coming quarters and push up inflation, as companies pass through higher costs.
In this environment, “private companies tended to exhibit higher profit margins and faster profit growth rates”, they said.
Partners Group’s Amoroso and Gillespie said that further US labour market weakness is likely to prompt a September rate cut by the Federal Reserve.
“Interest coverage ratios have improved for portfolio companies already and should benefit from further cuts,” they said.
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Amoroso and Gillespie also observed that all-in yields in private credit remain attractive across the US and Europe.
“While base rates have declined moderately in the US from their peak, the spread has seen more significant declines,” they said. “In Europe, instead, spreads have seen more moderate declines, but the base rate has declined slightly more.”
According to Partners Group, there is an opportunity in Europe, as the region benefits from a “favourable mix” of fiscal policy and lower rates.
As a result, the EU private sector is “showing signs of acceleration and could drive upside”.
“Corporate credit demand is showing an uptick from low levels alongside a reduction in interest rates by the ECB,” noted Amoroso and Gillespie.
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