Every atomic assertion extracted from the underlying record, ranked by evidence strength.
Income and operational value creation remain at the driving seat of return generation for private and alternative assets in the new regime.
Illiquidity and complexity premia for private and alternative assets are less generous than a decade ago.
Selectivity will be key in private credit going forward due to a narrower margin for error and a more asymmetric return distribution.
Amundi decided to harmonize the returns of private and alternative assets to a net of fees standard to make them comparable with liquid assets, starting this year.
The return premium of private equity over public equities has become increasingly polarized between the US and Europe.
Headline returns for private and alternative assets remain attractive versus liquid counterparts.
Higher nominal discount rates structurally cap valuation multiples for private and alternative assets.
Expectations for European private equity returns are around 2.5% higher than those for US private equity.
Infrastructure equity is one of the few asset classes where structural demand tailwinds are accelerating.
The dynamic portfolio relies less on fixed income carry alone and more on a combination of equities for growth, gold for resilience, and private assets for selective return enhancement.
US all-property spreads are at more expensive levels than in Europe.
Over the long-term, US real estate expected returns will overtake European counterparts, guided by higher income yields and faster rental growth.
Logistics and industrial properties may be favored in US real estate.
USD allocations show relatively more interest in private debt in a moderate-risk portfolio, reflecting the appeal of carry.
The USD efficient frontier remains broadly similar to last year's.
At higher risk levels, USD allocations tend to favor private debt and private equity, reflecting the stronger role of carry and income generation.
Private equity returns in the 2010s were largely driven by multiple expansion and financial leverage.
Multiple expansion and financial leverage are likely to be structurally impaired going forward in the 2026-2035 decade.
The 2026-2035 decade requires a private asset return architecture built on income yield, real earnings and cash flow growth, and selective illiquidity and complexity premia.
Elevated target allocations to private and alternative assets require disciplined vintage diversification and pacing plans to manage liquidity.
Manager selection remains critical for private assets, as net-of-fee returns vary widely across strategies and depend on operational capability and access to quality managers.
Private equity remains a cornerstone allocation.
European private equity sector tilts towards "old economy" businesses might benefit from Europe's strategic autonomy pivot and defense spending needs.
Key risks for private equity include close links between private equity and credit general partners, particularly through exposure to software businesses.
A delayed recovery in exit markets could extend J-curves and put pressure on Distribution-to-Paid-In-Capital (DPI) metrics for private equity.
The AI and digital infrastructure theme will drive the volume of physical investment in data centers and fiber networks to support edge computing and the "AI from bytes to bricks" shift.
The delayed energy transition still requires trillions in investment in the coming decades under long-term private or public-private regulated frameworks.
Europe's security pivot drives demand for logistics, communications, and energy independence infrastructure.
Geopolitical events affecting commodities might require investors to increase exposure to inflation-linked assets such as indexed infrastructure contracts.
Private credit assets under management are expected to double, if not triple, in size as banks retrench from leveraged lending.
Investors should focus on the carry private credit can generate but be aware of the risks that come with it, including liquidity, defaults, and valuations.
Themes to watch in private credit include deal exposure to software potentially becoming obsolete due to AI disruption.
Banks' retrenchment from mid-market lending in Europe is expected to sustain structural deal flow for senior debt deals.
Lower penetration of private debt into retail investors' portfolios in Europe could prevent the European market from experiencing potential disruption ahead.
EU private credit shows an appealing risk-adjusted profile.
Real estate has shifted from a valuation story to an income recovery story after a repricing in cap rates between 2022 and 2024.
Higher starting net rental yields are the primary return driver for real estate.
Limited near-term capital appreciation is expected for real estate.
Sector selection dominates all other allocation decisions in real estate.
Hospitality, prime retail, prime office, residential, and healthcare properties are more attractive for investors in Europe.
Traditional office and non-prime retail are challenged real estate sectors due to structural work-from-home habits and continued e-commerce penetration.
The "controlled disorder" backdrop, characterized by elevated dispersion, policy volatility, and unstable correlations, is precisely the environment where hedge funds have historically added most value.
Elevated cross-sectional dispersion, policy uncertainty generating macro-opportunities, and low correlation to equities and bonds are structural features of the current regime benefiting hedge funds.
Euro-based investors with a moderate risk profile (6% volatility target) can expect annual returns of about 4.5% over the next decade.
Including private and alternative assets lifts expected annual returns for Euro-based moderate-risk investors to 4.8%.
Dollar-based investors with a moderate risk profile can expect annual returns in the 5.6%-6.0% range.
Expected return levels for moderate-risk investors are broadly unchanged compared with last year.
Bonds remain the portfolio anchor for moderate-risk investors.
Equity risk becomes more selective for moderate-risk investors.
Private assets continue to enhance returns for moderate-risk investors, although less mechanically than in the past.
Global aggregate bonds represent roughly 42%-48% of a Euro investor's moderate-risk portfolio.
Global aggregate bonds represent 48%-52% of a USD investor's moderate-risk allocation.
The weight of global aggregate bonds in moderate-risk portfolios is slightly lower than last year, creating room for a measured allocation to gold.
Exposure to opportunistic fixed income (global high yield and EMBI) remains broadly stable at around 22%-25% across investor bases for moderate-risk portfolios.
Fixed income once again provides the core mix of income, resilience, and diversification for moderate-risk investors.
Equity allocations for moderate-risk investors have declined relative to last year, with a larger reduction in developed markets.
Amundi prefers emerging markets over developed markets for equities when expected returns are considered alongside currency effects.
In the USD moderate-risk portfolio, listed equity exposure falls to around 19%.
Hedged foreign fixed income offers an advantage through positive carry in the USD moderate-risk portfolio.
Adding private and alternative assets for investors with a medium liquidity preference lifts expected returns by around 30-40 bps.