Market Insight | View from Apollo
March 23, 2025

Beyond 60/40: Private Assets in an Era of High Public Valuations

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Torsten Slok

Partner, Chief Economist

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Matt O'Mara

Partner

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Torsten Slok

Partner, Chief Economist

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Matt O'Mara

Partner

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A combination of elevated public stock and bond public valuations, recalcitrant inflation, and higher-for-longer interest rates could be creating new challenges for 60/40 portfolios and an attractive entry point to private markets.

In a new episode of The View from Apollo podcast, Apollo Chief Economist Torsten Slok and Matt O’Mara, Apollo Partner and co-head of Apollo Aligned Alternatives, assess today’s market conditions, and discuss the potential benefits of private assets, which have historically outperformed following periods of elevated public equity valuations and interest rates.

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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Beyond 60/40: Private Assets in an Era of High Public Valuations

Credit markets are entering 2025 in a solid position. Although risks may appear one-sided given spreads are near multi-year tights, we expect the fundamental and technical backdrop to remain strong.

Key Takeaways

  • Valuations in public markets remain at lofty levels. Persistent inflation could keep interest rates higher for longer.
  • High valuations and an elevated rate environment, combined with other factors like strong correlations between stocks and bonds, could create challenges for investors with 60/40 portfolio allocations.
  • Periods of high public equity valuations have historically represented attractive entry points to private markets. A balanced portfolio of alternatives has meaningfully outperformed following past periods of elevated public equity valuations and interest rates.
  • Adding private markets to a 60/40 portfolio has historically enhanced returns while minimizing volatility, boosting returns per unit of risk across market cycles. 
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Podcast Equity Market Insight View from Apollo
Market Insight | View from Apollo
March 23, 2025

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