Many private wealth investors today are looking to augment growth and income in their portfolios while seeking diversification ^{[ 1 ]} of the public equities and fixed income they already own. More are examining private markets, understanding that private equity, credit and real estate can be core portfolio building blocks. We are also increasingly being asked by financial advisors to tap into the type of resources that are required to implement a private markets allocation, which Quadrangle can help advisors think through. The adoption of private markets into portfolios is a trend we have experienced with institutional investors around the world over nearly four decades.

And it makes sense. Many clients are surprised to learn that nearly 90% of scaled, established businesses and commercial real estate around the globe are privately owned, ^{[ 2 ]} a remarkable skew especially when we consider that many end investors use stocks and bonds as the traditional frame of reference. It means that many portfolios today contain an often unintended underweight to privately owned companies and assets. Many portfolios today are also missing out on an important source of diversification. In fact, our recent poll of Quadrangle University participants found that portfolio diversification is the number one benefit cited by respondents when explaining private markets to clients who are newcomers. ^{[ 3 ]}

The surge of investor interest in artificial intelligence provides an excellent backdrop for how private markets can be different. As attention to the subject grew over the last year, the major public-market means of accessing AI has led to some stupendous valuations. ^{[ 4 ]} But the price you pay still matters. Early on, Quadrangle has taken a picks-and-shovels approach to AI with a view that the necessary infrastructure will be uniquely valuable assets over the long run.

The firm has invested in the fastest-growing large-scale data center business in the world today, ^{[ 5 ]}  which we think is positioned to benefit from what is expected to be a once-in-a-generation surge in data creation. Sticking with long-term megatrends that take time to fully play out, and investing in the physical infrastructure at scale, has also been Quadrangle’s approach with e-commerce and warehouses, and rental housing amid a long-term housing shortage.  

Want to learn more?  Quadrangle stands ready to provide educational resources to familiarize yourself with these markets, the differences between asset classes and how you might consider incorporating them in client portfolios. Please feel free to access our Essentials of Private Markets program, which covers the basics of core private assets plus the perpetual fund structures that eligible individuals can use to access private markets. Overall, we strive to offer educational support to help make building a private markets program as efficient and user-friendly as possible. And of course, we are available to share our insights, answer any questions and expand upon any of our materials.

We are grateful to our clients for entrusting us with their own clients’ wealth, and we remain committed to providing you with institutional-quality alternative investment solutions which, as we always say, help you build wealth with Quadrangle. ^{[ 6 ]}