As part of our ongoing Strategic Asset Allocation coverage, we’re highlighting a new perspective from NDR’s Alternatives team with important implications for long-term portfolio construction. This week, we examine how private equity is evolving in the context of AI-driven market dynamics. In his latest publication, John LaForge, NDR’s Chief Alternatives Strategist, challenges the narrative around private equity underperformance, arguing that recent public market strength has been driven largely by Magnificent 7–led AI concentration rather than structural weakness in private markets. This distinction reframes private equity’s role not as a consistent outperformer, but as a diversifier within a broader portfolio.
Looking ahead in 2026, LaForge highlights a more differentiated opportunity set across private markets. He favors U.S. venture capital, given a reset in valuations and broader AI exposure, as well as European buyouts supported by more attractive valuations and ECB tailwinds. Infrastructure stands out as an AI-agnostic way to gain exposure to long-term growth themes, while private credit warrants caution amid tighter spreads and higher dispersion, making manager selection increasingly critical.
This material is for informational purposes only and does not take individual financial circumstances into account.
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