Client conversations Why private markets may be right for investors
There are many reasons for investors to consider private markets, including potential enhanced returns, possible improved income, and diversification.
Download the PDF
Alternatives Q3 Alternative Opportunities report
While fundamentals across private markets remain generally resilient, tightening credit spreads and elevated valuations in some growth-oriented segments have tempered our outlook. We remain neutral across most private market exposures, while continuing to favor real assets and hedged strategies. Our experts highlight opportunities in alternative credit, selective private equity segments, income-oriented real assets, and hedge fund strategies that may benefit from elevated rates and market volatility. (Read the complete Alternative Opportunities Q3 insights)
Private credit: Neutral as credit spreads tighten
We’ve reduced our modest overweight in private credit to neutral as spreads have tightened across much of the market. Despite this, private credit remains an important funding source for businesses and real assets and continues to offer potential illiquidity and complexity premiums. Alternative credit, particularly venture debt, is our favored strategy within the asset class.
Q3 private credit summary
Asset class |
Overall |
Valuations |
Fundamentals |
Secular trend |
|---|---|---|---|---|
Direct lending |
Neutral |
Neutral |
Neutral |
Attractive |
| Real asset credit | Neutral | Neutral | Neutral | Attractive |
| Alternative credit | Neutral | Neutral | Neutral | Attractive |
Private equity (PE): Neutral as relative value improves
We’ve upgraded private equity to neutral as free cash flow yields have improved relative to public equities and financing spreads remain supportive. We continue to favor growth and venture strategies, particularly early-stage opportunities where valuations appear more attractive. We also see continued interest in secondaries, although discounts have moderated from prior levels.
Q3 private equity summary
Asset class |
Overall |
Valuations |
Fundamentals |
Secular trend |
|---|---|---|---|---|
Private equity |
Neutral |
Neutral |
Neutral |
Neutral |
Real assets: Slight overweight supported by valuations and secular tailwinds
We remain slightly overweight real assets, including both real estate and infrastructure. In real estate, we favor defensive, income-oriented sectors and see opportunities driven by selective valuation dislocations. Infrastructure continues to benefit from strong fundamentals and long-term secular themes, particularly across digital infrastructure, power generation, and energy-related investments.
Q3 real assets summary
|
Overall |
Valuations |
Fundamentals |
Secular trend |
|---|---|---|---|---|
Real estate |
Overweight |
Attractive |
Neutral |
Neutral |
Infrastructure |
Overweight |
Unattractive |
Attractive |
Attractive |
Hedge funds: Slight overweight amid elevated rates and volatility
We continue to view hedge funds favorably, particularly strategies with lower sensitivity to broader market movements. Elevated interest rates, attractive arbitrage spreads, and the potential for continued market volatility support our outlook. We still view hedge funds as attractive, but we may moderate that when capital markets reopen and outlook for stock markets improves.
Q3 hedge funds summary
Asset class |
Overall |
Valuations |
Fundamentals |
Secular trend |
|---|---|---|---|---|
Event-driven and arbitrage |
Overweight |
Neutral |
Neutral |
Attractive |
Systematic trend |
Overweight |
Neutral |
Neutral |
Attractive |
(Read the complete Q3 Alternative Opportunities report)
Discover our capabilities
Our scale, combined with the breadth and depth of our offerings, means we have the flexibility to meet your needs as markets evolve.
Related insights
-
Alternatives SteelPath commentary on the midstream energy infrastructure industry
Invesco
September 11, 2026 -
Video
Alternatives Midstream energy infrastructure overview and benefits
Invesco
September 2, 2026 -
Alternatives What LNG, data centers, and power demand mean for midstream energy
Invesco
August 7, 2026 -
Private credit Private credit today: Separating fact from fiction
Invesco
May 6, 2026
Important information
NA5866209
Information is provided as of Jul 28, 2026, and sourced from Invesco unless otherwise noted.
Free cash flow yield evaluates a company’s ability to generate cash relative to its market value, helping investors determine the firm’s potential to meet obligations and reward shareholders.
An illiquidity premium is additional return investors expect as compensation for the cost and inconvenience of investing into assets that are not readily tradeable.
A complexity premium is the extra profit or yield an investor earns for taking on deals that are hard to set up, study, or manage.Arbitrage is the strategy of taking advantage of price differences in different markets for the same asset.
A spread in finance is the difference between two related values, such as prices, rates, or yields.
Alternative investment products and strategies—including hedge funds, private equity, private debt, and/or private real estate—carry a high degree of risk and may not be suitable for all investors. These investments often employ leveraging and other speculative practices that can increase the risk of loss, may be highly illiquid, and typically lack a secondary market. They are not required to provide periodic pricing or valuation information, may involve complex tax structures and delays in tax reporting, and are generally not subject to the same regulatory requirements as registered funds. Fees and expenses are often significant and may offset any trading profits, and underlying investments are frequently non-transparent and known only to the investment manager. Alternative investment strategies may involve additional risks such as concentrated ownership, counterparty default, and exposure to changes in interest rates, rental yields, and general economic conditions, which can lead to fluctuations in value. These investments may result in greater volatility within a portfolio and carry a substantial risk of capital loss. Restrictions on transferability may apply, and investors should be prepared for long holding periods and limited liquidity.
Event-driven strategies refer to an investment strategy in which an institutional investor attempts to profit from a stock mispricing that may occur during or after a corporate event.
Trend following strategy is an investment or trading approach that aims to profit by identifying and riding sustained price trends in various markets.
Investments in real estate-related instruments may be affected by economic, legal, or environmental factors that affect property values, rents, or occupancies of real estate. Real estate companies, including REITs or similar structures, tend to be small- and mid-cap companies, and their shares may be more volatile and less liquid.
The opinions referenced above are those of the author as of July 28, 2026. These comments should not be construed as recommendations, but as an illustration of broader themes. Forward-looking statements are not guarantees of future results. They involve risks, uncertainties, and assumptions; there can be no assurance that actual results will not differ materially from expectations.
Leaving Invesco.com
This link takes you to a site not affiliated with Invesco. The site is for informational purposes only. Invesco does not guarantee nor take any responsibility for any of the content.
Americas_United States_Invesco US
Change site/location