Private Markets, Infrastructure and Real Assets

Q4 Market Update

Fortunately, the year ended on a positive note as things improved! We experienced interest rate cuts, heightened fundraising, and a rise in M&A activity, all of which invigorated the market. This quarter was our most active of the year, with a significant focus on innovation and the energy transition.

The sector is on track for continued expansion, and as the significance of sustainable investments and infrastructure credit grows, fierce competition for top-tier talent will ensue.

As we head into 2025, the global private market landscape is shaped by regional dynamics, regulatory pressures, and an ever-growing focus on sustainability. From the financial hubs of London and New York to the emerging markets of the Middle East, private market firms are navigating a mix of challenges and opportunities. 

United Kingdom:

The UK private market has shown impressive resilience. Firms are increasingly incorporating ESG considerations into their investment processes, driven by regulatory pressures and investor demand. This shift has created a surge in demand for professionals who combine traditional financial expertise with sustainability knowledge. But finding these candidates isn’t easy.

The UK’s regulatory landscape is also evolving, with a growing emphasis on ESG disclosures and sustainable finance. This has led many private market firms to beef up their compliance teams and seek out professionals who can navigate complex regulatory requirements. Sector-wise, UK firms are more interested in technology, healthcare, and renewable energy, reflecting broader economic trends and ESG priorities.

Continental Europe:

Across the Channel, Europe is leading the way in ESG integration within private equity. Several firms are setting the standard with their strong focus on environmental sustainability. Despite some economic challenges, many European firms have had successful fundraising years, particularly for continuation vehicles dedicated to sustainability.

European private equity firms are also increasingly looking at cross-border investments, both within Europe and globally. This trend is driving demand for professionals with international experience and cultural competence. However, like their UK counterparts, European firms find it tough to attract and retain top talent, especially those with traditional private equity skills and ESG expertise.

Middle East:

The Middle East’s private equity landscape is undergoing a transformation. There’s growing interest in sustainable investments, with firms looking to integrate ESG considerations into their investment processes. This shift is partly driven by a desire to move away from traditional oil and gas investments, with more focus on sectors like technology, healthcare, and renewable energy.

Middle Eastern firms are also expanding their presence in international markets, particularly in Europe and the US. This global outlook is creating opportunities for professionals with cross-border experience. At the same time, there’s a push to develop local talent, with firms investing in training and development programmes.

United States:

Over in the US, the private market is a mixed bag. The political environment has had a significant impact on the industry, especially when it comes to ESG initiatives. Some firms are facing pushback on ESG-focused strategies, particularly in certain states. As a result, while ESG remains a focus, the approach in the US is more understated than in Europe. Many firms are integrating ESG considerations into their investment processes without making a big deal about it.

US private market firms are more interested in renewables, clean mobility, and digital infrastructure. However, there’s some uncertainty about how potential political changes might impact these focus areas. Fundraising has been challenging, especially for ESG-focused funds, but firms with strong track records and clear value propositions are still managing to raise capital.

One area where US firms are leading the pack is in the integration of technology into private equity operations. Data analytics for deal sourcing and ESG assessment is becoming increasingly common, creating demand for professionals with financial and technological expertise.

Looking Ahead:

Firms across all regions are navigating economic uncertainties, regulatory changes, and shifting investor preferences. ESG integration is a fundamental shift in how private market firms operate. This creates significant opportunities for professionals to combine financial expertise with sustainability knowledge.

While the specific trends and hiring patterns vary across regions, some common themes are emerging. These include the growing importance of ESG integration, the continued need for sector-specific expertise, and the increasing role of technology in private equity operations. Firms that can effectively navigate these trends, attract and retain top talent, and demonstrate tangible impact will likely thrive.

 As we move into 2025, it will be interesting to see how trends develop and how the global private market landscape continues to evolve. One thing is sure: adaptability and a keen understanding of local and global dynamics will be key to success in this rapidly changing environment.