Executive Summary

Equity Markets

Global equities (MSCI ACWI Index in USD) declined 3.2% during Q1 with mixed and highly volatile returns across geographies. International stocks performed strongly in January and February buoyed by expectations for global growth expansion, coupled with emerging markets exposure to picks and shovels AI themes (semiconductors in Korea and Taiwan) while US large-cap equities were flat due to technology sector weakness as investors increasingly scrutinized hyperscalers’ massive capex growth plans. However, global markets declined swiftly during March due to the US-Iran conflict and the resultant Strait of Hormuz closure accompanied by surging energy prices (oil prices increased from 60/barrel to 110/barrel with bouts of extreme volatility), significant shipping disruption, and revived inflation concerns. Following the recently announced US-Iran ceasefire, global equity markets have appreciated 5.3% through April 8, 2026, and have clawed
back much of the March decline.

Public Equities

• Expect mid-to-upper-mid SD annualized returns with strong earnings growth offset by modest valuation multiple compression (especially in the US).
• Expect greater convergence between US and international equity returns and between value and growth stocks relative to the prior seven years.

Fixed Income

• Expect mid-single digit returns across both “safe” and riskier corporate credit.
• Returns driven by high coupons and expectations for modest future declines in base Treasury yields, with offsets from slight spread widening from historically tight levels.

Private Credit

• Expect high-SD to low DD returns across the asset class, with lower returns for sponsor-backed direct lending strategies (especially in private evergreen direct lending funds) and higher returns for niche and specialty strategies.
• Going forward, we forecast lower base rates but slightly widening spreads.

Private Equity

• We forecast high-SD to low DD returns for existing private equity NAV with returns driven by EBITDA growth, stable valuations, and a modestly improving exit environment. Potential tailwinds also include lower base rates and better operational performance at portfolio companies (having navigated through cost inflation and macro uncertainty). However, outsized exposure to software companies may present headwinds should AI disruption of traditional software business models accelerate.
• Expect low-to-mid-teens returns for new buyout and growth equity funds with significant manager dispersion.