Conference Presentation, Panel
Private Markets After the Exit Boom: Liquidity, Insurance Capital, & Structural Discipline | GC 2026
Milken InstituteEric Platt, Dhiren Jhaveri, Camilla Languille, David Lyon, Eric Murzyn, Wil S. Warren
- The anticipated 2026 restart of exit activity to return cash, refinance private credit, and revive fundraising has been delayed by geopolitical events chilling dealmaking, with valuation disconnects and bid-ask problems expected to persist for the next six months to two years without self-correction.
- Longer hold periods are projected as firms require additional time to generate sufficient revenues or EBITDA for return-meriting valuations, with implied hold periods calculated to remain in the mid-teens for the foreseeable future and the DPI problem expected to resolve only over years, not months.
- Liquidity constraints surrounding the estimated $4 trillion of unrealized NAV will require innovation to unlock, driven by a need for businesses with high adaptability and resilience, while the aggregate return on this capital stack is forecast to be lower than levels seen six to eight years prior.
- Market dynamics are expected to shift toward more cautious underwriting amidst geopolitical, macroeconomic, and technological changes, leading to an exodus of firms lacking a niche, while primary capital deployment in this landscape is viewed as highly attractive for top GPs facing fundraising challenges.
- Structural changes in fund vehicles are anticipated, including the potential retirement of semi-liquid term funds, growth in evergreen pools seeking recaps and minority liquidity, and an increase in secondary trade volume and GP-led secondaries to address persistent headwinds.
- Institutional investors, including insurers and capital matchers, are expected to collaborate on longer duration solutions for 30-year liabilities, adapt asset-liability matching due to regulatory scrutiny, and seek high-quality credit opportunities capable of sustaining returns over time.
- Macroeconomic forecasts indicate that U.S. Treasury issuance will continue to push rates upward due to deficit spending, while the current Middle East conflict and inflation picture suggest lower rates are not imminent, with the conflict's financial impact not yet fully priced into portfolio company P&Ls.
- Regional opportunities are expected to emerge from Europe in the form of larger single-asset and multi-asset deals, while Mubadala intends to maintain its strategy to generate consistent five-year and ten-year returns regardless of geopolitical fluctuations.