Rio de Janeiro, Brazil
Velthorne Asset Management today released a new institutional strategy paper examining how private capital markets may play an expanded role in portfolio construction as investors navigate higher interest rates, tighter banking conditions, and ongoing market volatility.
The paper, authored by Lydia Everwyn, Global Head of Private Capital at Velthorne Asset Management, analyzes recent trends in private equity, private credit, and infrastructure investment, and outlines how long-duration capital strategies are being evaluated by institutional investors ahead of 2026.
According to Everwyn, the analysis reflects a broader reassessment of how liquidity, risk, and return are balanced in institutional portfolios. “Market conditions over the past several years have prompted investors to review the role of public and private assets in meeting long-term objectives,” Everwyn said. “Our research focuses on how private capital structures are being used to support operational growth, financing flexibility, and liability alignment.”
Private Credit and Changes in Corporate Financing
One section of the report examines the evolving role of private credit amid shifting bank-lending dynamics. Regulatory requirements and capital constraints have led some banks to reduce exposure to certain forms of corporate lending, increasing demand for non-bank financing solutions.
Everwyn notes that private credit strategies, including direct lending, are being considered by institutions as part of diversified fixed-income allocations. These structures often feature floating-rate terms and customized covenants, which may offer portfolio managers additional tools for managing interest-rate sensitivity.
Operational Improvements in Private Equity Portfolios
The report also evaluates operational initiatives within private equity-backed companies, including the adoption of automation and data-driven technologies. Rather than focusing on technology as a standalone investment theme, the paper highlights how operational efficiencies are being integrated into portfolio companies to improve productivity and cost management.
“In private markets, investors are often directly involved in governance and execution,” Everwyn said. “That involvement allows for targeted operational initiatives that may not be feasible in publicly traded environments.”
Infrastructure and Real Asset Investment
The final section of the strategy paper addresses infrastructure and real asset investment, particularly in areas related to energy, logistics, and digital infrastructure. Everwyn cites increased interest in assets that generate long-term, contracted cash flows and may provide partial inflation linkage.
The report emphasizes that these investments require extended time horizons and active management, and are typically evaluated within the context of long-term capital planning rather than short-term market movements.
Outlook
Velthorne’s analysis concludes that institutional investors are increasingly focused on portfolio resilience, diversification, and alignment with long-term liabilities as they assess allocation strategies for the coming years. The firm notes that private capital is one of several tools being evaluated in response to evolving economic conditions.
About Velthorne Asset Management
Velthorne Asset Management is a global investment firm serving institutional clients, including insurers, pension funds, and asset owners. The firm specializes in multi-asset strategies across public and private markets, with an emphasis on risk management, long-term capital preservation, and disciplined portfolio construction.
