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The rise of private markets

Author

Listed:
  • Sirio Aramonte
  • Fernando Avalos

Abstract

The last two decades have seen the growth and consolidation of private markets. These revolve around funds gathered from institutional investors by "alternative asset managers", typically private equity or venture capital firms that have subsequently expanded into credit. In an environment of light regulation, long investor horizons and low interest rates, the involvement of private market funds in firms' investment financing and restructuring has grown over time. The interactions of these increasingly important non-bank financial intermediaries with the wider economy and their response to monetary policy have not been fully explored. We find that, despite long investment horizons, private markets are as procyclical as public markets. As for monetary policy, its transmission differs according to the type of private market fund, exerting the strongest effect on private credit funds

Suggested Citation

  • Sirio Aramonte & Fernando Avalos, 2021. "The rise of private markets," BIS Quarterly Review, Bank for International Settlements, December.
    • Handle: RePEc:bis:bisqtr:2112e
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    References listed on IDEAS

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    Cited by:

    1. Iñaki Aldasoro & Sebastian Doerr & Haonan Zhou, 2022. "Non-bank lenders in the syndicated loan market," BIS Quarterly Review, Bank for International Settlements, March.
    2. Giulio Cornelli & Leonardo Gambacorta & Livia Pancotto, 2023. "Buy now, pay later: a cross-country analysis," BIS Quarterly Review, Bank for International Settlements, December.

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    More about this item

    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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