Asset Owner Insights from Austin: Takeaways from The Private Markets Texas Meeting

Members of the Nasdaq team recently attended The Private Markets Texas Meeting in Austin, Texas for a series of panels and networking. The event brought together over 250 Texas-based LPs and GPs.

Here are some of the key takeaways for institutional investors from the event.

 

Private debt in the spotlight

One of the biggest topics discussed over the course of the event was private debt. Given the current public market downturn and high interest rate environment, many asset owners are looking to add more fixed income and structured debt products to their portfolios through opportunistic investing.

According to data from Market Lens, public pension plans reported $11 billion in commitments to private debt strategies in Q3 2022. Year to date, these investors have allocated 15% more capital to the asset class than they did through the same period of 2021.

Looking forward to 2023 the TopQ+ forward calendar features 36 private debt funds confirmed or projected to be fundraising for a first close in 2023. Direct lending strategies are seeking to raise over $23 billion while distressed debt strategies are targeting nearly $13 billion.

Demand for the US Dollar

In addition to general market volatility, currency exposure is also top of mind for asset owners. They are increasingly interested in their currency exposures and the degree to which their fund managers are using currency hedging. For international investors investing in US dollar-denominated funds, depreciation of local currencies against the dollar is also affecting how they’re considering new investments and managing liquidity.

Strength in stability and experience

Above all, institutional investors at the event emphasized the importance of strong, stable teams in their portfolios. Understanding team dynamics and how fund managers are navigating the current market has helped reassure investors that their fund managers are the right stewards for their capital despite short-term challenges. Additionally asset owners are taking more time in the due diligence process to understand how fund managers have performed through a full market cycle and how much experience key decision-makers have investing in a down market.

 

Nasdaq for Asset Owners

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Andres Ramos

Nasdaq

Andres Ramos is a specialist at Nasdaq focused on the world of institutional investing.

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