The CRE correction that began in mid-2022 appears to be in its later stages.

Banks’ new role as partners to private credit is emerging amid headwinds in the banking sector.

Fundraising has consistently outpaced deployment, leaving large cap PE with 3.5 years of buying capacity.

Given the volume of exits in the queue, secondaries are likely to play an increasingly vital role.

The market has priced in significant Fed rate cuts by mid-2025, which will reduce private credit’s yield. With inflation normalizing, however, real yields should remain attractive relative to history.

The ingredients for a market rebound are present, setting the table for a more appetizing menu of investment opportunities in 2025 and beyond.