Market Insight | View from Apollo
January 17, 2025

Can Private Markets Be the Alternative to Lofty Public Market Valuations?

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Torsten Slok

Partner, Chief Economist

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Alexander Wright

Partner

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Torsten Slok

Partner, Chief Economist

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Alexander Wright

Partner

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In a new episode of The View from Apollo podcast, Apollo’s Chief Economist Torsten Slok and Alex Wright, Partner and Global Wealth Strategist at the firm, discuss the role of private markets in diversifying portfolios against a backdrop of significantly elevated public market valuations.

In a wide-ranging conversation, this episode explores the heightened risks in public markets, the outlook for private credit, private equity, and infrastructure in 2025, and the future of private markets in wealth portfolios.

The View from Apollo features conversations with thought leaders across Apollo and portfolio companies of funds managed by Apollo, each bringing their unique perspectives on current macroeconomic trends, the impact to various businesses, and what it can mean for investors.

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Can Private Markets Be the Alternative to Lofty Public Market Valuations?

High public market valuations pose a key question for allocation adjustments in 2025: What can one do to enhance potential returns, improve diversification, and mitigate volatility? 

 Key Takeaways

  • Public markets are expensive and concentrated: Both public stocks and bonds are trading at elevated valuations, offering low risk premia. In equities, performance is increasingly reliant on a small group of mega-cap stocks, amplifying portfolio risks.
  • Diversification is harder to achieve: The rising correlation between public stocks and bonds has practically eroded the diversification benefits of the traditional 60/40 portfolio, leaving investors more exposed to systemic risks.
  • Private markets can enhance portfolio resilience: Private markets can offer access to differentiated return drivers, lower correlations with public markets, and opportunities to improve risk-adjusted return potential, which we believe make them a valuable component of a broader portfolio strategy, especially in light of high public market valuations.
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Podcast Market Insight View from Apollo
Market Insight | View from Apollo
January 17, 2025

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