Insights Chart of the Week

Private infrastructure's resilience when prices rise 

The evidence is clear: Private infrastructure has historically shown a strong correlation with inflation during key periods. This chart illustrates one-year rolling fund returns rising in step with the Consumer Price Index (CPI) during past inflationary episodes. 

For investors, the “why” is as important as the “what.” Many infrastructure contracts include price escalators tied to CPI or the Producer Price Index (PPI). The essential, inelastic nature of these assets often confers pricing power—allowing revenues to adjust as costs increase, which can help returns keep pace during inflationary cycles. 

That combination of long-term contracted cash flows and inflation linkage is a core reason the asset class is frequently used as a portfolio hedge in higher-inflation regimes—making this week’s chart especially relevant for today’s environment. 

Europe's Local Buyout Edge

With less exposure to global supply chains than other regions, European middle-market services can provide investors with upside potential, despite today's tariff-heavy environment. As trade patterns evolve, managers with on‑the‑ground expertise are well-positioned to navigate new investment opportunities. 

For investors seeking strategic optionality, regional buyout exposure can provide diversified entry points and multiple exit routes, supporting long‑duration capital deployment and the ability to weather the storm. 

Learn more about Hamilton Lane's approach to Direct Equity. 

Private Markets NAV Growth: Why Venture Stands Out

Companies are staying private for longer, and this trend is reflected in the growth of Net Asset Value (NAV) within private markets. Over the past decade, Venture Capital (VC) and Growth Equity—strategies fueled by innovation and high-growth companies—have become increasingly prominent. VC and Growth NAV increased from approximately $652 billion in 2015 to about $2.78 trillion today, representing more than a fourfold increase over the past decade. 

This variability underscores the value of diversifying across private market strategies. By balancing exposure to growth-oriented strategies like VC and Growth Equity with more income- or stability-focused strategies (such as private credit or infrastructure), investors can better manage risk and pursue a mix of growth, income, and capital preservation. 

AI, Hungry for More than Data

AI, data center and digital platform disruptions are already changing pricing models and cost structures across industries. With data center demand conservatively forecasted to be at an 18% compound annual growth rate from 2022-2028 in the U.S., the ability to meet this demand (or not) will separate the winners from the losers.

We believe investors in select renewable power generation and companies supporting the data center buildout are well-positioned for future growth. With the AI revolution moving towards us like a freight train, active portfolio management matters more than ever.

Learn more about Hamilton Lane's approach to Impact and Infrastructure investing.

Secondaries: All-weather performance across cycles  

Discounted purchase prices, mature assets and limited blind‑pool risks are just some of the factors fueling secondaries’ value proposition. Over the past 25 years, secondary funds' highest and lowest 5-year annualized returns have outperformed several key private markets strategies and public market equivalents (PMEs).  

Along with their ability to mitigate steep J‑curves and deliver early distributions, secondaries’ can provide investors with an all-weather strategy that has achieved consistent returns through both booms and busts.  

Learn more about Hamilton Lane’s approach to Secondaries. 

Middle Market PE Keeps Beating the Big Guys

Middle market private equity deals have shown compelling operational outperformance versus larger buyouts. Over the 2003–2024 period, realized middle market buyout investments delivered a median EBITDA growth of 77%, compared to 63% for mega/large buyout deals. This highlights the consistent ability of middle market managers to drive stronger business transformation, often through more direct operational improvements and engagement with companies that offer greater value-creation potential. 

Venture Secondaries: $80B+ in Liquidity Potential 

Venture secondaries are speeding ahead, now accounting for 22% of total LP-led secondary market volume, yet penetration remains low. If venture secondaries as a percentage of venture capital's total addressable market (TAM) were to reach buyout levels, their TAM could top $100B. 

With less than 20% of the venture secondaries market penetrated, active portfolio management can help investors both access highly sought-after venture-backed companies and get liquidity from them.  

Learn more about Hamilton Lane's approach to Venture Capital.  

Asia’s Investment Evolution: Private Markets Take the Lead

Asia’s private equity landscape is entering a new chapter. It’s maturing structurally while retaining the momentum and growth potential of an emerging market. For private wealth investors in the region, this is a compelling combination. Our #ChartOfTheWeek looks at the region’s historical performance compared to public benchmarks.   

Asia’s public markets have long been characterized by heightened volatility, often driven by shifts in foreign investor sentiment and capital flows. In contrast, the region’s private markets have demonstrated more consistent performance, with time-weighted returns not only outperforming APAC public equities over the past 15 years but also surpassing global listed equities for much of this period. This sustained outperformance reflects a deepening maturity and resilience within Asia’s private investment ecosystem. 

Today, Asia’s private markets are combining the structural maturity of a developed asset class with the energy and growth potential of an emerging market, as explored in our latest insight: Asia’s Private Markets: Growth, Innovation, Value.

A Closer Look at One Key Benefit of Secondaries 

The secondaries market has evolved rapidly, fueled by its growing role in addressing liquidity needs within private market portfolios. But as the secondaries market has expanded, so have misconceptions. Many investors new to this space struggle to understand the value of secondary assets and remain uncertain about the future of this evolving private market sector.  

Among those advantages: a consistent track record of strong returns and lower dispersion compared to other private market strategies. This stability often stems from the maturity of the assets acquired, which helps mitigate volatility and downside risk. 

As understanding deepens, secondaries are positioned to become a cornerstone of private market investing. 

Infrastructure Secondaries: An Important Addition to Your Portfolio 

If infrastructure secondaries had a slogan, it would be “focus on quality at a good price." By acquiring a fund interest at the tail end of the investment period – typically 3-5 years into its lifecycle – the blind pool will have been ‘unblinded,’ but the portfolio will likely not yet be significantly marked up. Buying interests at this point of inflection can offer access to specified assets, accelerated liquidity and attractive upside potential, with less downside risk than investing in primaries alone. 

Investors seeking attractive risk-adjusted returns should consider active managers who have the expertise to evaluate and include infrastructure secondaries in their portfolio construction. 

Learn more about Hamilton Lane's approach to infrastructure. 

Private Equity: Expectation vs. Reality

The Capital Asset Pricing Model (CAPM) estimates expected investment returns based on market risk. Traditionally, it has served as a rough benchmark for private equity buyout strategies, which generally track public markets—with lower volatility. For years, the model held up reasonably well. But in 2023 and 2024, its predictions diverged from actual private equity returns. 

One major factor behind this disconnect was an industry-wide slowdown in exits—IPOs, acquisitions, and other liquidity events. 

Is this a temporary deviation or the beginning of a new normal? Early 2025 data points to a potential rebound in exit activity, even if volumes remain below long-term averages. High-profile exits, such as Figma’s recent IPO, suggest renewed momentum. If exit conditions continue to improve, private equity performance may once again align more closely with CAPM-based expectations. 

The Highs and Lows of Venture Capital and Growth

Between 1990 and 2010, venture capital rode a wave of transformative innovation—from the birth of the internet to the rise of early tech giants. Yet this era also saw dramatic volatility, with the dotcom bust exposing the risks of speculative investing and unsustainable business models. 

From 2010 to 2024, five-year annualized returns have continued to show attractive upside but with less dramatic swings, reflecting a maturing market with larger, more resilient businesses. The landscape is still evolving, and the emergence of AI and other cognitive technologies is poised to open a new frontier of disruption. As history shows, periods of innovation can deliver exceptional returns—but only for investors who can identify the right access points. 

Size Matters...But Not How You Think

Spoiler alert: Deal size matters, not fund size. There is zero correlation between fund size and performance.  

From 2003-2024, middle-market buyout deals ($1-3B) produced higher median returns than large ($3-10B) and mega (>$10B) deals with less risk than small deals (<$1B). Investors seeking attractive risk-adjusted returns may want to explore middle-market buyout opportunities in direct equity, where deal size, selectivity and portfolio construction matter. 

Learn more about Hamilton Lane's approach to Direct Equity.