Monday Market Minute | Nov 28, 2022

Year-end portfolio positioning begins as private markets investors assess the most volatile year since 2008

What Moved

As November drew to a close, the shape of 2022's performance picture was clear. Private credit was the standout performer in the alternatives allocation, with floating-rate portfolios delivering total returns in the high single to low double digits — among the best in the asset class's history. Infrastructure held steady. PE faced a mixed picture: energy-exposed funds thrived, while growth-oriented and tech-focused strategies suffered. Real estate corrected sharply. Crypto collapsed. Bonds posted their worst calendar year in modern history.

Why It Matters

The 2022 scorecard validated a core principle of alternative investing: asset class selection and structural design matter far more than market timing. Investors who held floating-rate private credit, essential-service infrastructure, and conservatively underwritten real assets weathered the storm. Those who chased yield in leveraged, opaque, or structurally fragile vehicles — whether crypto platforms or aggressive MICs — learned costly lessons. The year reinforced that private markets are not a monolith; the dispersion of outcomes within alternatives exceeded the spread between asset classes.

Signal to Watch

Year-end fund valuations and performance reports — the gap between managers who mark to market honestly and those who delay recognition would become apparent in Q4 reporting.

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