Private markets are “regaining momentum” so far this year, with deal activity rebounding and supportive financial conditions helping to extend the cycle, according to New York Life Investment Management’s 2026 Private Markets Outlook.
The outlook found private markets activity is improving, with opportunity increasingly being driven by selectivity and diversification as investors lean into more complex and fragmented markets to unlock differentiated sources of return.
It also found that lower short-term rates are improving confidence and liquidity, while global policy support and resilient economic growth – bolstered by AI spending – are creating “a constructive backdrop across private equity, private credit, real estate, and real assets”.
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“Private markets are regaining momentum. Easy financial conditions are reviving deal activity, even as elevated long-term rates enforce discipline. That gives the cycle room to run, but it also makes selectivity more important,” said Sarah Hirsch, global markets strategist at New York Life Investment Management.
As the credit cycle matures, the report found that private credit fundamentals remain well supported.
“Corporate liquidity is healthy, defaults remain low, and defensive capital structures continue to underpin private credit deployment, particularly in the middle market,” it said.
The report said a key takeway for investors is to focus on resilient segments. “In our view, this includes middle and lower middle market credit, which we believe provides defensive characteristics, including lower leverage and limited reliance on covenant-lite transactions,” it said.
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Global megatrends are increasingly emerging as powerful drivers of private markets opportunity, according to the report.
“Private markets will play a central role in financing the buildout of global megatrends,” said Lauren Goodwin, economist and chief market strategist at New York Life.
“AI is a clear example. Private markets are well-suited to provide the long-term funding and strategic partnerships required to support AI investment needs over the coming years.”
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