Secondary buyer target returns analysis

There has been a material increase in target venture returns as performance has softened in many technology businesses and private valuations have not been appropriately reset. Increased return targets for infrastructure, real estate, and private credit are likely interest-rate-driven as debt has become more expensive, impacting the cost of capital and providing more attractive opportunities to generate yield. While we haven’t seen a substantial difference in return expectations for buyout assets from last year, investors are much more conservative in projecting the financials and exit assumptions that go into their models.