🗞️ Sunday Digest: Private Markets Insights 9/14
Risk on in credit, VC valuations climb, and capital is creeping back to CRE
Happy Sunday!
Here’s what caught my eye in private markets this week:
💳 Private Credit: lenders are taking on more risk again.
🚀 Venture Capital: deal activity is stabilizing, valuations keep climbing.
🏢 Real Estate: fundraising hit its lowest point since 2011 in 2024, but tide may have turned.
Chart of the day, folks:
Before we dive in:
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💳 Private Credit – Proskauer Survey 2025
Proskauer’s annual survey of lenders across the US, UK, and Europe shows one thing clearly: risk appetite is back, with lenders voicing “strong signs of optimism for the coming year”
Invest in private credit? You’ll want to read this:
Leverage is creeping up – 36% of lenders now comfortable underwriting 7.0x+ deals (a sharp reversal from the post-2022 caution).
Speaking of leverage in private credit:
Covenants are getting lighter – only 35% of US lenders refuse covenant-lite transactions (down from 52% last year). Nearly half allow it for EBITDA >$50M.
EBITDA add-backs stretch further – just 2% still allow uncapped add-backs, but 54% now permit 25%+ caps, up from 38% in the last survey.
Check out this case study on BCRED and this one on Golub’s non-traded private credit fund, also read about PIK:
🚀 Venture Capital – Carta Q2 2025 Report
Excellent report from Carta on the state of venture capital (and let’s be honest: visually appealing reports are a joy to read.)
Rounds smaller, but steady – deal count up from Q1, though still down 13% YoY. Average Series A–D round size fell 3–9%.
Valuations up – Series A medians jumped 20% YoY. Across all stages, medians are 43% higher than two years ago (Series D +115%).
AI drives sector divergence – SaaS (+91%) and hardware (+110%) have surged, while education (–89%) and energy (–85%) have cratered.
Protections tick up slightly – 14.5% of Q2 rounds included investor protections (still below 2019–22 averages).
🏢 Real Estate – NEPC Private Markets Report
Signs of recovery, but with plenty of nuance across property types and strategies:
Trends & sectors
Alternative property types (student housing, senior housing, medical office) gaining traction.
Data centers: ~3% vacancy, fundraising oversubscribed. (Do we call a bubble yet?)
Office: surprisingly, transaction volume up ~70% YoY.
Liquidity & Fundraising
ODCE (open-end diversified core equity) redemption queues improving (13% of NAV vs. 18% peak).
Gross inflows back ($2B in Q1 2025), though net flows still negative.
2024 was weakest year for opportunistic/value-add fundraising since 2011 (~$100B).
Early 2025 slow, but momentum building.
Industrial still the only sector with sub-5% cap rates.
Invest in real estate? You’ll want to read this:
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Thanks for reading. If you have any questions or suggestions, just hit reply — I’d love to hear from you!
-Leyla
that Proskaer chart is interesting - looks like 2022 was pick leverage