Last week saw a wealth of macroeconomic data releases in the United States. The least one can say is that, for the time being, geopolitical turbulence and oil-price volatility are having absolutely no visible impact on the world’s largest economy.
Both manufacturing and services activity indicators came in markedly above economists’ expectations, firmly in expansion territory, and point to robust US GDP growth for the current quarter. This positive momentum was confirmed at the end of the week by exceptional employment figures. In May, more than 170’000 jobs were created, twice the consensus estimate. The previous month’s figure was also revised upwards. The unemployment rate remained stable at 4.3%.
However, the consequence of this strength is an increasingly high probability that the Federal Reserve will raise its policy rates, which weighed heavily on equity markets at the end of the week.
Over the past decade, private assets have experienced remarkable growth. Driven by attractive returns and seemingly subdued volatility, private equity and private debt have become key components of diversified portfolios. In a low-interest-rate environment, these strategies offered a compelling promise: generating superior returns without being exposed to the day-to-day fluctuations of public markets.
This enthusiasm led many institutional investors to reach elevated allocation levels. As this market gradually became saturated, asset managers intensified their distribution efforts toward private clients, notably through “evergreen” funds. Similar to traditional investment funds in their strategy, these vehicles allow partial redemptions at regular intervals. In practice, however, these liquidity windows remain limited, typically around 5% per quarter.
Since November 2025, investor sentiment has nevertheless shifted. Initial concerns emerged within private debt before spreading more broadly across private markets. These concerns stem in part from the exposure of many funds to technology companies, particularly software businesses. The rapid rise of artificial intelligence is reshaping their economic models, creating uncertainty regarding future growth prospects and valuations.
Against this backdrop, several leading private debt managers have been forced to restrict redemption requests in order to preserve the stability of their funds. Last week, this trend reached a new stage with the announcement of similar restrictions within a private equity fund. Major players such as Blackstone, Partners Group, and Blue Owl, which have enjoyed significant success in recent years, have also been affected. Having launched their products earlier, many of their investors have accumulated substantial gains and are among the first to take profits.
After years of sustained inflows, this slowdown appears partly natural. It also reflects a sometimes incomplete understanding among investors of the liquidity constraints inherent in these strategies. The coming quarters are likely to remain marked by further adjustments, as the balance between redemption requests and managers’ ability to liquidate underlying assets gradually normalizes.
This situation serves as a reminder of a fundamental reality: private assets are, by nature, illiquid. Investment vehicles offering frequent redemption opportunities must contend with this constraint, which can lead to restrictions during periods of market stress. A long-term investment horizon therefore remains essential.
That said, the structural appeal of private markets should not be called into question. These markets provide access to opportunities that are often unavailable in public markets, particularly during phases of corporate growth or transformation. The current normalization phase may even create attractive entry points for investors with available capital and the ability to commit for the long term.
The rise in euro area inflation to 3.2% in May, combined with more hawkish comments from the European Central Bank (ECB), has strengthened market expectations, which now fully price in an increase in policy rates at its meeting this Thursday. The ECB would therefore be among the first major central banks to act.