Private markets have outperformed public markets and we are putting more money there: CIO

Market Overview - The current market is well-priced but not exuberant, with investors focused on three key areas: moderating inflation, global earnings growth driven by AI and technology, and government regulatory easing [1] - A potential rally in the market could occur if these areas continue to show positive surprises [1] - Investors are also monitoring the rebound in emerging markets, particularly China, as global demand is significantly sourced from these regions [1] Private Markets Insights - There are indications of overpaying in private markets, suggesting a cautious approach to valuations [2] - The excitement around AI is reminiscent of the early automotive industry, where many companies emerged but only a few succeeded [3][4] - The app layer of AI presents challenges in predicting winners, leading to high valuations that may not be sustainable [5] Government Impact - The potential government shutdown could complicate the SEC's operations and delay IPOs, although historical data suggests minimal impact on stock markets during past shutdowns [6][7][8] - Investors are adopting a wait-and-see approach regarding the shutdown's duration and severity, reflecting a cautious stance [9] Investment Strategy - The company has a significant portion of its assets in private markets, with a current allocation of approximately 40-45%, aiming to increase private equity exposure from 12% to 20% [11][12] - The strategy emphasizes a low-cost passive approach in public markets while seeking outperformance through selective investments in private markets [12][13] - Engaging in direct co-investment activities is a priority, focusing on thematic deal sourcing and selection [13]