2026

Private

MarketsOutlook

ANewContinuum

CAPITALATRISK.INVESTMENTSCANRISEORFALLINVALUE.FORPUBLICDISTRIBUTIONINTHEU.S.,CANADA,LATIN

AMERICA,SELECTCOUNTRIESINEUROPE(SEETHEFULLDISCLAIMER),ISRAEL,SOUTHAFRICA,HONGKONG,

SINGAPOREANDAUSTRALIA.FORINSTITUTIONAL,PROFESSIONALANDQUALIFIEDINVESTORSANDCLIENTSINOTHERPERMITTEDCOUNTRIES.

EPMM1125U/M-5008093-1/27

Welcomeletter

Privatemarketsareevolvingtomeet

thechallengesofanewinvestingera.BlackRockiscommittedtostayingattheforefrontof

thatevolution.

There’snodenyingthatprivateassetsarebecomingakeycomponentofawhole-portfoliostrategyformoreclients.Thisishappeningatatimewhenprivate

marketsthemselvesarebecoming:

Moretransparent:Investorshavemoreinformationonprivatefundmanagers,theassetstheyinvestinandtheirperformance.

Moreholistic:Whole-portfolioviewsandrisk

managementarebeingconnectedacrossthespectrumofpublicandprivateholdings.

Moreaccessible:Evergreenstructuresandwrappers,suchasELTIFsinEuropeandU.S.modelsfeaturingprivatemarketallocations,areopeningupprivate

marketassetclassesformoreinvestors.

Theseadvancesarereshapingportfoliosnotjustfor

leadinginstitutionsbutalsoforwealthinvestors,awayfromtraditional60/40approachestowards50/30/20allocations,withprivateassetsmakingupthe20%.

CountriesliketheU.S.andtheUKareconsidering

legislativechangestoincreasetheadoptionofprivateassetswithindefinedcontributionplans,initiatives

thatcouldtransformthefutureofretirementsavings.

Tomeetthisfundamentalchangetotheinvestment

universeandprovidethebestpossiblesolutionsforourclients,BlackRockisrapidlyexpandingourplatformforprivatemarkets.

In2025,wewelcomedHPS,aleadingglobalprivatecreditmanager,andPreqin,theforemostprovider

ofprivatemarketsdataandinsights,followingthe

integrationofGIP,anindustry-leadinginfrastructuremanager,whobecameapartofBlackRockin2024.

WithHPSjoiningBlackRock,wehavecombinedthefirm’sprivatecredit,leveragedfinance,CLO,privateequityco-investments,secondariesanddeal-

originationcapabilities.Webelieveasingleteam

workingtogetherisbestpositionedtomeettheneedsofsponsors,limitedpartnersandprivatecompaniesforintegratedfinancingsolutions.

Ininfrastructure,wehavebroughttogether

governmentsandtechnologyleaderstofinancethe

futureofAIandenergy.Andindataandanalytics,we

areintegratingPreqinandourAladdin?platformto

seamlesslytranslateprivatemarketsintothelanguageofclientportfolios.

Asmoreclientsintegratepublicandprivatemarkets

intotheirportfolios,theyarelookingtosimplifythe

equationbyseekingsolutionsfromfewerpartnerswhocanmeettheirfullsetofneedsfromalphagenerationtodiversification,andtransparencytowhole-portfolio

outcomes.

Weareproudtobeattheforefrontofenhancing

opportunitiesinprivatemarketsforclientsofallsizes

andaroundtheworld,justaswehavedoneacrossassetclassesformorethan35years.

RobertS.Kapito

PresidentandaDirectorofBlackRock

2

CAPITALATRISK.INVESTMENTSCANRISEORFALLINVALUE.FORPUBLICDISTRIBUTIONINTHEU.S.,CANADA,LATINAMERICA,SELECTCOUNTRIESINEUROPE(SEETHEFULLDISCLAIMER),ISRAEL,SOUTHAFRICA,HONGKONG,SINGAPOREAND

AUSTRALIA.FORINSTITUTIONAL,PROFESSIONALANDQUALIFIEDINVESTORSANDCLIENTSINOTHERPERMITTEDCOUNTRIES.

EPMM1125U/M-5008093-2/27

Keytakeaways

In2026,privatemarketsaretransforminghowsocietiesbuildinfrastructure,howbusinessesfinancegrowth,andhowinvestorsachieve

diversificationintheirportfolios.

Episodesofhighvolatilityareleadingprivatecredittotakeonalargerpercentageofoveralllendingactivity,withexpandingopportunitiesinasset-basedfinancingandhigh-grade

corporatecredit.

Megaforces,suchasdigitalizationandAI,thetransitiontoalow-carboneconomy,and

demographicchangeareincreasingtheglobalopportunitysetforprivateinfrastructure

investment.

Inprivateequity,moreinvestorsareusingsecondariesforliquidityandportfolio

management,andwe’reseeingattractiveopportunitiesinbothgrowthequityandco-investments.

Theglobalrealestatemarkethasundergoneareset,withresidential,industrialand

specializedpropertytypes,suchasdatacenters,takingthelead.

Morewealthandretirementinvestorsareparticipatinginprivatemarkets,taking

advantageofnewfundstructuresfor

accessibilityandliquidity,aswellasnewtechnologiesforportfoliotransparency.

Introduction

Privateequity

Tableofcontents

5

Privatecredit

8

Infrastructure

12

15

Realestate

20

Alternativeportfolio

solutions

23

Sources::Unlessotherwisenoted,sourceforalldataisBlackRock,asofNovember2025.Assumptions,opinionsandestimatesareprovidedforillustrativepurposesonly.Theyshouldnotberelieduponasrecommendationstobuyorsellsecurities.Forecastsoffinancialmarkettrendsthatarebasedoncurrentmarketconditionsconstituteourjudgmentandaresubjecttochangewithoutnotice.

CAPITALATRISK.INVESTMENTSCANRISEORFALLINVALUE.FORPUBLICDISTRIBUTIONINTHEU.S.,CANADA,LATINAMERICA,SELECTCOUNTRIESIN

EUROPE(SEETHEFULLDISCLAIMER),ISRAEL,SOUTHAFRICA,HONGKONG,SINGAPOREANDAUSTRALIA.FORINSTITUTIONAL,PROFESSIONALAND3

QUALIFIEDINVESTORSANDCLIENTSINOTHERPERMITTEDCOUNTRIES.

EPMM1125U/M-5008093-3/27

Authors

AdebayoOgunlesi

Chairman&ChiefExecutiveOfficerofGlobalInfrastructurePartners,apartofBlackRock

BrentPatry

GlobalHead,EquityPrivateMarkets,Co-HeadofGP/LPSolutions

AdamRyan

ChiefInvestmentOfficer,Multi-Alternatives

MichaelPatterson

Co-PresidentandHeadofDirectLending,HPS,apartofBlackRock

RaffaeleSavi

GlobalHead,BlackRockSystematic

Contributors

AmandaLynam

HeadofMacroCreditResearch

LynnBaranski

GlobalCo-HeadandCIO,PrivateEquityPartners

PaulTebbit

GlobalCo-HeadforRealEstate

VidyVairavamurthy

ChiefInvestmentOfficer,

AlternativePortfolioSolutions

HughLawson

ManagingDirector,HPS,apartofBlackRock

MadelaineO’Connell

ManagingDirector,HPS,apartofBlackRock

ThomasMueller-Borja

GlobalCo-HeadforRealEstate

4

CAPITALATRISK.INVESTMENTSCANRISEORFALLINVALUE.FORPUBLICDISTRIBUTIONINTHEU.S.,CANADA,LATINAMERICA,SELECTCOUNTRIESINEUROPE(SEETHEFULLDISCLAIMER),ISRAEL,SOUTHAFRICA,HONGKONG,SINGAPOREANDAUSTRALIA.FORINSTITUTIONAL,PROFESSIONALAND

QUALIFIEDINVESTORSANDCLIENTSINOTHERPERMITTEDCOUNTRIES.

EPMM1125U/M-5008093-4/27

IntroductionPrivatecreditInfrastructurePrivateequityRealestatePortfolioperspective

Introduction

Privatemarketsatastepchange

Astheworld’scapitalseeksresilienceinachanging

globaleconomy,privatemarketsholdthekeytomany

pressingchallengesandopportunities.In2026,theyhavethepotentialtoredefinethewaysthatstatesand

corporationsbuildinfrastructure,howbusinessesfinancetheirgrowthandhowinvestorsbuilddiversifiedportfolios.

IntheU.S.,thenumberoflisteddomesticcompanieshasfallenfrom8,000inthemid-1990stofewerthan4,500today,1asaresultofconsolidation,de-listings,and

companieschoosingtoremainprivateforlonger.

Challengesremainforprivateinvestors,though,particularlyaroundliquidity.

WithIPOandM&Aactivityslowinginrecentyears,many

high-qualitycompaniesarestayingprivatelongerand

increasinglyworkingwithintheprivatemarketsfor

financing,namelythroughprivatecreditandsecondary

strategies.Astheseareasexpand,privatecreditandprivateequityarebecomingessentialtocapturingthefull

opportunityset.

Distributionsatapremium

Investorscontinuetolisttheexitenvironmentforprivateassetsasaprimaryconcern.

Proportionofrespondents

Exitenvironment

Assetvaluations

Geopoliticallandscape

Interestrates

Stockmarketvolatility

Dealflow

Competitionforassets

0%20%40%60%80%

25-Jun24-Jun23-Jun

Sources:1.IPOData,JayR.Ritter,July2025.Chart:Preqin,June2025.Investorswereasked:‘Whatarekeychallengesforreturngenerationinthenext12months?’

CAPITALATRISK.INVESTMENTSCANRISEORFALLINVALUE.FORPUBLICDISTRIBUTIONINTHEU.S.,CANADA,LATINAMERICA,SELECTCOUNTRIESINEUROPE(SEETHEFULLDISCLAIMER),ISRAEL,SOUTHAFRICA,HONGKONG,SINGAPOREANDAUSTRALIA.FORINSTITUTIONAL,PROFESSIONALAND

QUALIFIEDINVESTORSANDCLIENTSINOTHERPERMITTEDCOUNTRIES.

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EPMM1125U/M-5008093-5/27

EPMM1125U/M-5008093-6/27

Equityinvestors,meanwhile,aresolvingforliquidityinthe

evolvingsecondariesmarket.Aswe’llexplorefurtherinthe

privateequitysection,secondariescanofferinvestorsareliableplacetosellfundholdingsaspartoftheirregularportfolio

management.Andfundmanagerscansellindividualfund

holdingsonthesecondariesmarket,allowingthemtoreturncapitaltoinvestors.Atthesametime,managersareableto

offerspecificfundholdingstonewinvestorsviacontinuationvehicles.

Inadditiontoactingasacritical“releasevalve”forliquidityinprivatemarkets,secondariescanoffernewinvestorsinstant

diversificationwithshorterholdingperiods.Andsecondariesareemergingasattractiveinvestmentsinprivatecredit,

infrastructureandrealestateaswell.Thisnewfoundliquidityplacesprivateassetsintoalessbinaryrelationshipwithpublicmarketsandintosomethingmorelikeacontinuum.

Comingtogether

Newfundstructures,liquiditysolutions,anddataareallowingmoreinvestorstobringpublicandprivatemarketstogetherintheirportfolios.

TheNew

Continuum

ofprivateandpublicmarkets

Publicmarkets

?Liquid

?Accessible

?Transparent

Newfundstructures

Newliquiditysolutions

Newdata

Privatemarkets

?Illiquid

?Hardertoaccess

?Opaque

Forillustrativepurposesonly.

CAPITALATRISK.INVESTMENTSCANRISEORFALLINVALUE.FORPUBLICDISTRIBUTIONINTHEU.S.,CANADA,LATINAMERICA,SELECTCOUNTRIESINEUROPE(SEETHEFULLDISCLAIMER),ISRAEL,SOUTHAFRICA,HONGKONG,SINGAPOREANDAUSTRALIA.FORINSTITUTIONAL,PROFESSIONALAND

QUALIFIEDINVESTORSANDCLIENTSINOTHERPERMITTEDCOUNTRIES.

6

Anevolvinginvestorbase

Thiscontinuumisbecomingvisibleintheinvestorbaseaswellasthevehiclesbeingusedtoinvestinprivateassets.Newer

clientsegments,suchaswealthinvestors,areincreasingtheirallocationstoprivatemarketslargelyviaevergreenfund

structures,suchasELTIFs,LTAFsandmodelportfolios,whichcanoffergreaterliquidity.

Theseopen-ended,semi-liquidvehiclesoffercontinuous

access,allowinginvestorstosubscribeandredeemregularly,unliketraditionalclosed-endfunds.Evergreenfundscanalsoaddresslegacybarriers,suchasintermittentcapitalcallsandlimitedliquidity,whileofferingperiodicdistributionsand

simplifiedtaxreporting.

Thisbroadeningoftheinvestorbaseisn’tduetojustwealth

investors.IntheU.S.andelsewhere,thereisapushtomake

privatemarketsaccessibletoretirementinvestorsindefined

contributionplans.InAugust,theU.S.DepartmentofLabor

rescindeditspreviousguidanceagainst401(k)planfiduciariesincludingprivateassetsintheirplans.Accordingto

BlackRock’sownresearch,1addingprivateassetstothetarget-datefundsusedinmanyretirementplanscouldgenerate

about15%moremoneyinaparticipant’s401(k)over40yearsthroughcompounding.

Webelievetheadditionofthesenewparticipantswilladd

stablecapitalandliquiditytoprivatemarkets,whiledrivingnewinnovationsintheyearahead.

Entiremarkets,wholeportfolios

Thenewcontinuumofprivateandpublicmarketsisalso

reflectedinagrowingemphasisamonginvestorsforawhole-portfolioapproachthatincorporatesactiveequities,fixed

income,cash,multi-assets,indexfundsandprivatemarkets.

Ablendedapproachthatincorporatestheentirespectrumofpublicandprivateassetclassesisnecessarytocapturesomeofthebiggestinvestmentopportunitiesemergingtoday,in

ourview.Oneexampleisartificialintelligence,manyofwhoseemergingleadersareprimarilyaccessibletoinvestorsonly

throughventurecapital,growthprivateequityandprivatecredit.

Atthesametime,theimmensebuildoutofdatacenters,datatransmissiontowersandcablenetworks,alongwiththeir

relatedpowergenerationandstorageneeds,arecreatingfreshopportunitiesforinfrastructureandrealestate

investors.

Asthedistinctionbetweenprivateandpublicmarketsgrows

lessabsolute,therearemoreinsightstobegainedfrom

managingboth.Thisdynamichasledmoreinvestorstoaddtotheirprivatemarketsallocationsandexploremorewaysthat

privateassetscanimprovetherisk-rewardprofileoftheiroverallportfolios.

Thecomplexityandopacityofprivatemarketsremaina

challengeforthislargepoolofpotentialinvestors.Butas

investorfamiliarityanddatatransparencyimprove,thetrendofmorevarietiesofinvestorsaddingtotheirprivatemarketsallocationsisoneworthwatchingintheyearahead.

Moreaccessible

Thenumberofevergreenfundscontinuestogrowrapidly,withtotalNAVexceedingUS$400billionforthefirsttime.

800

700

600

Numberoffunds

500

400

300

200

100

0

2016201720182019202020212022202320242025YTD

Sources:Chart:Preqin,October2025.Totalno.ofliquidprivatemarketfundseachyearincludesBDCs,IntervalFundsNon-tradedREITs,tenderOffers,ELTIFs,andLTAFs.Forillustrativepurposes

only.BlackRock“ThePowerofPrivateMarkets,”June2025.UsingourproprietaryBlackRockInvestmentInstitute’spubliclyavailablecapitalmarketassumptions(CMAs)anddatafromPreqin,eFrontandourprivate-marketsinvestmentteams,weestimatethataddingprivateequityandprivatecredittoatargetdatesolutioncouldboostoverallinvestmentperformancebyroughly50bponaverage,eachyearthroughoutthestrategy’slifetime.The15%higheraccountbalanceover40yearsfigureisderivedusingourCMAs”)forprivatecredit(directlending)andUSprivateequity(buyout).The

CMAsusedareestimatedovera5-30-yearinvestmenthorizon,allowingforflexibilityinportfolioconstructionandscenarioanalysis,andassumea10%returnforprivatecredit,11%forprivateequity,5%forpublicfixedincomeand8%forpublicequities.A10%-20%averagereallocationfrompublictoprivate,blendedacrossprivateequityandprivatecredit,isestimatedtoprovideanupliftofapproximately50bp,averagedacrosstargetdatevintages.Expectedreturnsandrisksareforward-lookingprojectionsthatshouldnotberelieduponwhenmakinganinvestmentdecision.

Suchprojectionsdonotreflectactualperformanceandcannotaccountfortheimpactthateconomic,marketandotherfactorsmayhaveontheimplementationofanactualinvestmentprogram,nordotheyconsidertheimpactoftradingdecisions,liquidityconstraints,fees,taxesandotherfactorsonfuturereturns.Norepresentationismadethatanyproposedorfuturestrategywillachievethe

expectedreturnoritsinvestmentobjective.Actualreturnsmaybehigherorlowerthantheexpectedreturn.

CAPITALATRISK.INVESTMENTSCANRISEORFALLINVALUE.FORPUBLICDISTRIBUTIONINTHEU.S.,CANADA,LATINAMERICA,SELECTCOUNTRIESINEUROPE(SEETHEFULLDISCLAIMER),ISRAEL,SOUTHAFRICA,HONGKONG,SINGAPOREANDAUSTRALIA.FORINSTITUTIONAL,PROFESSIONALAND

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QUALIFIEDINVESTORSANDCLIENTSINOTHERPERMITTEDCOUNTRIES.

EPMM1125U/M-5008093-7/27

IntroductionPrivatecreditInfrastructurePrivateequityRealestatePortfolioperspective目

Privatecredit

Episodesofhighvolatility,aswesawin2025,historicallyhavethelong-termeffectofacclimatingmoreborrowerstoprivatecredit.

Asset-basedfinancingisoneareaofprivatecreditwhereweexpecttoseeaprofoundincreaseinopportunitiesin2026.

Drivenbyheighteneddemand,privatehigh-gradecredithasbeenexpanding,andweexpectthattocontinueintheyearahead.

Achangeinmindset

Heightenedvolatilityanduncertaintydrovemore

borrowerstoprivatecreditin2025,andweseethem

leadingtocontinuedgrowthin2026.Thatvolatility,drivenlargelybypolicyannouncementsandtheiraftershocks,

persistedthroughouttheyear,thoughinvestorshavere-enteredthemarketsastariffpolicyhasclarified.1

Throughthisperiod,privatecreditfundamentalshaveheldupwellasthemajorityofcompanieshavenavigatedrecentvolatilitywithresiliencyandevenEBITDAgrowth.2Based

onexperiencewithourownportfoliocompanies,largercompanieshavegenerallybeenabletomanagethis

environmentofhigherbaseratesandinflationary

pressure,mostlybyusingacombinationofcostcontrolsandcostpass-throughs.

Theyear’selevatedmarketvolatilitydisruptedthe

syndicatedloanmarketafterastrongfirstquarter.BroadlysyndicatedloannewissuanceinApril2025wasthelowestithadbeensinceAugust2024,atjustUS$7billion.

Volatilityalsogavesomebankspauseinsyndicatingnewdeals:13dealsrepresentingUS$10.7billionwerepulled

fromthesyndicatedmarketthroughtheendofApril2025,andtheleveragedloanmarketwasonthecuspofits

longestrunwithoutadealsinceatleast2013.3

Whilesyndicatedcreditmarketsopenedupinthesecondhalfoftheyear,thistypeofbankandbroadlysyndicated

loanmarketreactiontovolatilityhasthepotentialtocreatearealandlastingopportunityforprivatecredit.

Periodsofelevatedmarketvolatilityhavegenerallybeenfollowedbyperiodswhenprivatecredit’sshareofthetotalleveragedfinancemarkethasgrownrapidly.

Privatecreditissuancelevelshavehistoricallyremained

relativelyconsistentthroughoutmarketenvironmentsduetothelonger-termnatureofprivatecredit’sunderlying

capitalbase.Atthesametime,thedisruptionofsyndicatedloanmarketscanhelpreinforceprivatecredit’scertaintyofexecutionandthetermsitoffersrelativetopublicmarkets.

Evenaftervolatilityrecedesandotherlendersre-enterthemarket,borrowersoftenremainreceptivetopayingthe

premiumfinancingcostsassociatedwithprivatecreditinexchangeforincreasedcertaintyofexecution.This

dynamiccanbeparticularlypronouncedamongissuers

financingM&Aorfacingspecificnear-termmaturitiesorotherdeadlines,whereexecutioncertaintyismorecritical.

Wealsobelievethatrepeatedboutsofvolatilitycanhaveacumulativeimpactonthemindsetofprospectiveissuers,supportingastructuralshifttoprivatecreditsolutions.

Creditisoneareawherethepublic-privatecontinuumisa

matterofcommonpractice-banksfrequentlypartnerwithprivatelendersonlargerloans,wherethebanks’balance

sheetsmaybeconstrained.Atthesametime,privatecreditmanagersfrequentlycompeteforthesamedealsas

syndicatedlenders,withborrowerswillingtopaythe

private-creditpremiumbasedonotherfactors,likecertaintyofexecutionandtheflexibilitytocustomizesolutions.

Sources:1.ChicagoBoardOptionsExchangeVolatilityIndexandBloombergEconomics’TradePolicyUncertaintyIndex,October2025.2.LincolnInternational–PrivatemarketPerspectives,June2025.3.PitchbookLCD,September2025.

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CAPITALATRISK.INVESTMENTSCANRISEORFALLINVALUE.FORPUBLICDISTRIBUTIONINTHEU.S.,CANADA,LATINAMERICA,SELECTCOUNTRIESINEUROPE(SEETHEFULLDISCLAIMER),ISRAEL,SOUTHAFRICA,HONGKONG,SINGAPOREANDAUSTRALIA.FORINSTITUTIONAL,PROFESSIONALAND

QUALIFIEDINVESTORSANDCLIENTSINOTHERPERMITTEDCOUNTRIES.

EPMM1125U/M-5008093-8/27

Volatilityandprivatecredit

Followingpastperiodsofmarketturbulence(withthebeginningoftheCovidlockdownsasoneexception),privatecredithastakenonalargerpercentageoflendingactivity.

Privatecreditmarketshare

VIXindex

45%

10%

3%

201420152016201720182019202020212022202320242025

Sources:BankofAmericaGlobalResearchasofMarch31,2025;ChicagoBoardOptionsExchangeVolatilityIndexasof9/30/2025.Forillustrativepurposesonly.Pastperformanceisnotaguaranteeorareliableindicatoroffutureresults.

9

CAPITALATRISK.INVESTMENTSCANRISEORFALLINVALUE.FORPUBLICDISTRIBUTIONINTHEU.S.,CANADA,LATINAMERICA,SELECTCOUNTRIESINEUROPE(SEETHEFULLDISCLAIMER),ISRAEL,SOUTHAFRICA,HONGKONG,SINGAPOREANDAUSTRALIA.FORINSTITUTIONAL,PROFESSIONALAND

QUALIFIEDINVESTORSANDCLIENTSINOTHERPERMITTEDCOUNTRIES.

EPMM1125U/M-5008093-9/27

Ontherise:Asset-basedfinance

Asset-basedfinance(ABF)continuestobearapidlygrowing

segmentofthemarket,andweexpectthattrendtocontinuein2026.ABFhelpsenabletheconstruction,maintenanceand

efficientfinancingofthetangibleassetsweuseinourdaily

lives-frombuildingsandinfrastructure,tofleetsoftrucksandforklifts,toaircraft,andmissioncriticalmedicalequipmenttonameafew.Italsoincludesintangibleassetssuchasmusic

royaltystreams,sportsfranchisesandotherintellectualproperty.

Theassetsbeingfinancedgenerallyhavelongandusefullives,overwhichtheygeneratecontractuallybasedcashflows.

Durablecashflowsenabletheassetstobefinancedinwaysthatremainremovedfromthegeneralcreditoftheborrower.

Thiscanoffertwobitesattheapplefromacreditunderwritingpointofview:thecreditworthinessofthecounterpartyusing

theassetandtheinherentvalueoftheassetbeingfinanced.

Bothelementsoftengrowwithinflation.

Forinvestors,privateABFisawaytocapturetheilliquidity

premiumpresentinprivatemarkets.Fromaportfoliopointof

view,thereturnstreamsfromABFoftenhavelowercorrelationstobroadercorporatelending,makingthemastrong

complementtocorporatedebtholdingsinaportfolio.Atthesametime,ABFcangenerateattractivereturnswith

meaningfuldownsideprotection.Thediversityofunderlyingassetsalsomitigatessinglepointoffailurerisk.

ABFasawholecurrentlycomprisesalargerportionofthe

globaldebtcapitalmarketsthanevencorporatecashflow-

basedlending.WeestimatethetotalABFmarketataround

US$26trillion,1andanticipateitwillcontinuetogrowoverthenextdecade,withcertainassettypespotentiallyachieving

double-digitannualgrowthrates.2

PrivatefinancingsareasmallportionoftheoverallABFmarkettoday,thoughwebelievetheyhavethepotentialtoapproach

thelevelofprivatefinancingsinthecorporatecashflow-basedlendingmarket,whichtodayexceeds10%.Thisgrowthmaybefueledbyincreaseddemandforflexibleandcustomized

financings,asoperatorsseektooptimizeworkingcapitalandfundbusinessgrowth.

Inourview,thisgrowthwillbereinforcedbythedramatic

increaseinprojectedcapitalexpenditureinasset-intensive

sectorsoftheglobaleconomy,suchastheenergyanddigitalinfrastructuresectors.Atthesametime,bankbalancesheetsareconstrainedandcannotprovidethecapitaltomeetthe

lendingneedsoftheglobaleconomy-akeyreasonwhytheprivatecorporatecreditmarkethasgrownsorapidly.

Increasingly,wealsofindourselvesaspartnerswithbanksonABFtransactionsthroughforward-flowarrangements.Thesearrangementshelpbanksdeploythecapitaltheyhaveas

efficientlyaspossible.

Perhapsmostinterestingly,proprietaryoriginationeither

ownedorcontrolledbyprivatecreditplayersmaykeepABF

loansandleasesinprivatehands.Manyprivatelendersownorotherwisecontroloriginationplatforms,whichgenerate

growingopportunitiesforprivateABFsolutions.

Datacentersandequipmentleases

ManyattractiveABFopportunitiesinvolveAIanddigital

infrastructure.Hyperscaledatacentersbenefitfromhighlyratedcounterparties,whoarepreparedtosign15-20yearleases-afirmfoundationforfinancing.

Thechipsandserversinsidethedatacenterscanalsobefinanced,ascanprimaryandback-uppowergenerationsystems.

Roomtogrow

Asset-basedfinanceisoneareaofopportunitywhereprivatelendersarejustbeginningtospreadtheirwings.

Asset-basedfinance

(includingrealestate)

-US$26T

Corporatecredit

-US$13T

Asset-basedfinance

(excludingrealestate)

-US$5.5T

Privatecredit

-12%

Private

credit

-5%

Sources:1.OliverWyman,PrivateCredit’sNextAct”.April2024,forAsset-BasedFinanceAssetmarketsize.CorporateCreditmarketsizingdatafromthefollowingsources:ICEBankofAmericaasofJune2024(TickerC0A0forIGCorporate,H0A0forHYCorporate),CreditSuisseLeveragedLoansIndexasofJune2024,andPreqinPrivateCreditAUMasofJune2024.2.ResearchandMarkets.“Asset-

BasedLendingMarketForecastReport,”O(jiān)ctober28,2024;FutureMarketInsights,“Asset-BasedLendingMarket,”August28,2025;HPSResearch.Forecastsoffinancialmarkettrendsthatarebasedoncurrentmarketconditionsconstituteourjudgmentandaresubjecttochangewithoutnotice.

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CAPITALATRISK.INVESTMENTSCANRISEORFALLINVALUE.FORPUBLICDISTRIBUTIONINTHEU.S.,CANADA,LATINAMERICA,SELECTCOUNTRIESINEUROPE(SEETHEFULLDISCLAIMER),ISRAEL,SOUTHAFRICA,HONGKONG,SINGAPOREANDAUSTRALIA.FORINSTITUTIONAL,PROFESSIONALAND

QUALIFIEDINVESTORSANDCLIENTSINOTHERPERMITTEDCOUNTRIES.

EPMM1125U/M-5008093-10/27

Beyonddatacenters,manyusersofbusiness-critical

equipmentpreferabalance-sheet-lightmodelwherethey

leaseratherthanowntheassets.Opportunitiesinthistypeofequipmentfinanceareextensiveandrangefrommedical

equipmenttotruckfleetstoaircrafttophotocopiers,tonameafew.Manyofthesetypesofassetscomewithfinanceleases,wherethesumoftheleasepaymentsisclosetothevalueof

theasset.Theself-amortizingqualitiesoftheseleasescanbeveryattractive.Thekeytosuccessinthissectorisanefficientplatformthatcanoriginateassets,underwritethecreditoftheenduserinatimelymannerandservicetheassetsasneeded.

Real