2023 was a year of twists and turns although it ended up being a good one for our portfolios with solid absolute returns and, critically, portfolios are now above their previous high-water marks. There were good contributions from listed equities, private and liquid credit and smaller positive contributions from absolute return. Private equity was broadly flat in aggregate with opportunistic and real estate strategies offsetting losses in early-stage venture capital investments. We believe we are now in a new regime with higher interest rates than before the pandemic, with the era of low/zero/negative rates over. This adjustment means good risk reward is available in areas of secured lending and opportunistic credit strategies. Dispersion is also higher, leading to more relative value opportunities for active management. Pricing readjustment in the private equity sector is leading to better risk-adjusted opportunities across all areas, with secondaries a current sweet spot.
London W1J 0DP