Franklin Templeton sees S&P 500 as high as 7,800, beating consensus
Institutions are expected to continue seeking liquidity given that distributions remain well below historical levels. Secondaries managers, the report notes, are buying seasoned assets, shortening the J-curve and returning capital faster, while also offering diversification across vintage, general partner, geography, industry and stage.
Real estate valuations are described as having fallen from 2021 peaks, often to levels below replacement costs.
The office sector remains troubled, but the survey identifies opportunities in multi-family, industrial manufacturing, senior living and necessity retail. Longer-term themes cited include innovation, demographics, housing, shifting globalization and resiliency.
Infrastructure is characterized as an emerging opportunity, with the most attractive areas identified as digital infrastructure, decarbonization, deglobalization and demographics — rather than traditional assets such as roads and bridges.
On private credit, the survey pushes back against systemic-risk concerns. Franklin Templeton’s teams say they have been tracking default rates and analyzing market conditions, and identify middle-market direct lending, asset-based finance and commercial real estate debt as attractive pockets.
