Bank for International Settlements examines the rapid expansion of private markets and their growing role in global corporate financing, particularly as alternative asset managers step in where traditional banks pull back. It challenges the perception of stability, arguing private markets behave as procyclical as public ones and may amplify economic swings.
The Rise of Private Markets
Bank for International Settlements
Sirio Aramonte, Fernando Avalos
Research
14 Pages
Key Takeaways
Private Market Growth Surge: Assets in private markets have expanded significantly over the past 20 years, becoming a primary funding source for smaller firms across both advanced and emerging economies.
Procyclicality Similar To Public: Despite long lockups, private markets show comparable cyclical sensitivity to public markets, with investment activity rising and falling alongside broader economic cycles.
Monetary Policy Transmission Differences: Private credit funds exhibit the strongest response to policy shifts, with tighter conditions materially affecting lending volumes and financing costs relative to equity-focused strategies.
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