JP Morgan Sees “Generational Investment Opportunity” in Real Estate — Evening Brief – 01.29.25

JP Morgan Asset Management has released its seventh annual Global Alternatives Outlook, providing a 12-to-18 month forecast across various alternative asset classes. The report analyzes investment opportunities amid global policy shifts, focusing on private equity, private credit, real estate, infrastructure and transport, hedge funds, and secondaries.

The outlook highlights several key investment themes. Real Estate: Pro-growth policies are expected to drive net operating income (NOI) growth, with U.S. properties offering what the report describes as a “generational investment opportunity” as valuations appear to be bottoming out. Infrastructure & Transportation: These assets are well-positioned to benefit from evolving global trade routes and rising domestic logistics demand, while also serving as a hedge against inflation.

“With the U.S. economy in a mid-to-late cycle stage, private markets present potential opportunities for enhanced returns versus public markets, inflation protection, and diversification benefits,” said Jed Laskowitz, global head of private markets and customized solutions.

The report underscores potential growth in private equity due to favorable tax and regulatory changes, which could boost corporate earnings and stimulate IPO and M&A activity. Meanwhile, the private credit market may benefit from strong U.S. economic growth, though rising interest rates could pose risks for weaker borrowers.

The report notes that hedge funds could capitalize on market volatility, with long/short strategies and macro approaches being particularly well-positioned to benefit from price fluctuations. Additionally, secondary markets provide an efficient entry point into private investments, offering liquidity benefits and risk mitigation by acquiring existing stakes at potentially favorable valuations.

Anton Pil, global head of alternatives solutions, emphasized the growing importance of alternative investments in today’s market environment. “In an environment where traditional portfolios face headwinds such as high valuations, positive stock-bond correlations, and persistent rate volatility, the case for alternatives becomes increasingly compelling,” he noted.