Panel
Public Market Paradigm: Strategies in a Volatile | Global Conference 2025
Milken InstituteDan Primack, Ryan Israel, Jimmy Levin, Stephen McLennan, Alyssa Rieder, Alexander Roepers, Alex Rupert, Alyssa Reuter, Steve McLennan
- U.S. large-cap indexes are expected to face a zero or negative return period over the next five to ten years due to current bubbles, high valuations driven by passive investing and low interest rates, and unsustainable recent growth.
- AI-related stocks, including NVIDIA, Palantir, and Tesla, are characterized as being in a bubble that could collapse following a growth hiccup or technological shift, with NVIDIA's future price dependent on sustained spending or potential disruptive technology changes.
- Private market valuations for AI companies are viewed as having a speculative, bubble-like nature with fundamental backing issues, while the broader private equity sector faces headwinds over the next three to five years regarding excess returns from low leverage and multiple expansion.
- M&A and IPO markets are currently considered inactive but are expected to revive once market certainty returns.
- Europe is viewed as highly attractive due to low EBITDA multiples and anticipated positive outcomes from a German trillion-dollar package and a Ukraine settlement, while Japan is seen as attractive contingent on the return of the Chinese consumer following a trade deal.
- The U.S. capital market depth and productivity growth are expected to continue, though firms are evaluating the long-term attractiveness of the region amidst current volatility and the global repatriation of capital.
- Policy uncertainty, specifically regarding tariffs, is seen as a risk that could negatively impact the economy and specific sectors like hospitality through second-order effects such as reduced business travel, prompting some strategies to raise cash and trim affected positions.
- Crypto is anticipated to provide strong financial returns over the next couple of years, though there is a expressed fear regarding the potential for another major fraud in the sector within the next four years.
- Permanent capital structures are considered increasingly valuable for long-term horizons, allowing for control-oriented investments in public and non-public markets, with specific platforms evolving toward diversified holding companies capable of holding assets indefinitely.
- Active management is expected to remain critical for risk-adjusted returns, offering an advantage over passive inflows and diversification in navigating new events, inflection points, and long-term strategic forecasting where AI faces limitations.
- Artificial intelligence is projected to be highly effective for short-term tasks such as calculating the next market tick or predicting quarterly earnings, but is expected to be less powerful for 5 to 10-year strategic outlooks that require handling unique situations, empathy, and rapid environmental changes.
- The firm maintains a flexible mandate to invest in both small-cap value and high-multiple growth stocks, while increasing selectivity in private equity opportunities and focusing on value creation drivers like revenue expansion and margin maintenance.