Global Private

Markets Outlook
Tackling the turning point in private markets allocation
FEBRUARY 2025
A Broad range of private market capabilities across
New York Life Investments

NYL Real Estate Investors Division

Private Debt Private Equity Real Estate Private Assets Multi-Manager

• Direct lending • Fund investments • Core

• Impact investing • Secondary investments • Core-plus
• Unitranche • Co-investments • Value added
• Special situations • Emerging and diverse • Opportunistic
• Junior and mezzanine • GP Stakes • Real estate debt
• CLOs • Private real assets

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GLOBAL PRIVATE MARKETS OUTLOOK

Executive Summary

The last two years can be described as a slow-motion liquidity crunch across private markets. Consistently high interest rates created a domino
effect on liquidity, effectively freezing portfolios with private investment exposure. In the second half of 2024, this effect began to reverse. The
combination of lower interest rates, improving deal flow, capital-intensive megatrends, and the democratization of alternatives may unearth a
generational opportunity in private markets allocation.
 Tackling the turning point: four transitions impacting private allocation in 2025

Global rates are moving lower Deal flow is returning

Cyclical turning points

• Many central banks are cutting interest rates. Lower rates have improved • Sponsor pressure for liquidity, sustained for the last several years, is
investor confidence and borrower conditions, but rate levels are still high finally driving improvements in exit activity.
enough to provide attractive income generation potential. • Post-U.S. election “animal spirits” drive hope for lighter regulations and
• U.S. rates are stickier than those in other countries, but the bar for rate less red tape in the market.
hikes from here is high. • Bid-ask spreads for high-quality assets have been reasonable. For
• Rates volatility will be a feature of 2025 investing, but inflation and the lower-quality assets, bid-asks spreads show early signs of improving.
labor market have mostly normalized for business operation.

Debt and equity can perform well at the same time. Allocating across geographies The slow-motion credit crunch in private markets is over. 2025 should be a strong
can provide access to different stages of the rate cutting and credit creation cycles. vintage for new capital entering the market.

Private markets allocation is growing Global megatrends are driving capital-

Structural turning points

and democratizing intensive investments

• Institutional allocations to private markets have grown even as interest • Global megatrends related to supply chain re-globalization, electrification,
rates have risen in recent years. and digitization are changing the global economic model. Efficiency is no
• Public equity concentration has reduced the average investor’s overall longer as important as access to and security of key resources.
portfolio diversification. • These transitions are driving a capital-intensive period of activity, creating
• Investors of all kinds want access to the early stages of value creation, sector and diversification opportunities.
and the “main street” engines of economic growth.
Competition and performance dispersion may increase. We believe there is an Investors may benefit from a stronger medium-term economic backdrop. Demand for
opportunity to diversify into smaller fund sizes, where market dynamics are less certain sectors and resources is likely to increase. Volatility in inflation, interest rates,
efficient and value creation opportunities can be more readily accessed. and general macroeconomic conditions may be higher.

Opinions of New York Life Investments, 2025.

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Our view of key asset classes
Investors willing to act decisively may benefit from strong structural tailwinds, robust exit markets, and newfound optimism in 2025.

Private equity Private credit Real estate Real assets

• We see 2025 as a major turning point for • During a turbulent time, private credit has • The early phase of countries’ rate-cutting • In our view, global transitions towards
U.S. private equity. Buy-side activity is finally been a relative bright spot, topping private cycles may kickstart a generational digitization, electrification, and supply chain
rebounding after two years of anemic asset classes in terms of fundraising growth, opportunity in real estate allocation. A re-globalization are likely to increase demand
fundraising and distributions. Exits improved increases in assets under management, and normalizing yield curve tends to signal the for real assets.
strongly in the second half of 2024, performance. largest range in debt and equity opportunities
• We believe this demand may come through
kickstarting the process to bring investors for private investors.
• Resilient economic activity and modestly at least two channels. The first is a physical
liquidity and enable reinvestment.
lower interest rates support confidence in • Europe has seen more price discovery need for commodities and materials to build
• Fundraising has been concentrated in large credit performance for 2025. Leverage may already. While the U.S. may see more the infrastructure required to fuel these global
and mega funds, creating an opportunity for rise as the economic cycle extends, driving volatility, especially in office space, we megatrends. The second is that this capital-
middle market and lower-middle market our focus on credit quality. believe the bottom has arrived for many intensive stage in the global economic
managers to sell upmarket. sector valuations. In our view, this means a environment may lead to higher inflation and
• In the event of a more significant economic
market timing opportunity in equity may be interest rate volatility. Historically, real assets
• Moderate interest rate levels and higher slowdown, the direct relationship between
arising. have outperformed during periods of higher
expected macroeconomic volatility likely borrowers and lenders in private credit may
inflation and interest rate volatility.
mean that private equity funds will need to allow funds in this space to navigate risks • Investors have often focused on disruptions
implement effective value-creation initiatives more fluidly. This appears to be even more to office space related to work-at-home • Despite higher valuations in the foundational
to grow company profits. the case for the middle market. Historically adjustments. But similar disruptions are layer of megatrends like AI, valuations for the
speaking, default rates for middle-market driving higher rents in other sectors. inputs to these investment processes have
• New sources of liquidity have emerged over
private companies have been lower and Environmental improvements, better not seen as much uplift. We believe that
the last few years that we believe provide
recovery rates have been higher when amenities, and strong demand related to attractively priced assets with cash-flow-
private equity investors with diversified
compared to similar asset classes. secular changes (e.g. demand for data generating properties may provide return
opportunities to generate liquidity, creating
centers warehousing, and logistics) create generation and diversification potential.
more stability for the space.
opportunities in our view.

The “deep dive” section at the end of this piece illustrates one of our highest conviction perspectives
in this turning point period: size. We see the lower middle market as an opportunity for
diversification, relative stability, and attractive supply-demand dynamics for investors.

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Table of contents

1 2 3
Capital market Asset class views High conviction
conditions • Private equity • A global case for investing in the lower
middle market: private equity and
• Private credit
private credit
• Real estate
• Real assets

CLICK ON ANY TITLE OR SUBTITLE TO JUMP TO THAT SECTION.

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GLOBAL PRIVATE MARKETS OUTLOOK

Capital market conditions

The global interest rate cycle is at a turning point…
Rates have moved lower, improving market sentiment and extending the cycle. But they are not low, preserving income generation
opportunities.

Higher for longer interest rates are being priced into SOFR and EURIBOR futures

SOFR SOFR futures Euribor Euribor futures

3
Percent

-1
2014 2016 2018 2020 2022 2024 2026 2028

Sources: New York Life Investments Global Market Strategy, Federal Reserve, European Central Bank (ECB), Bloomberg, Macrobond, January 2025. The Secured Overnight Financing Rate (SOFR) is a broad measure of the cost of borrowing cash overnight collateralized by Treasury securities. The Euro
Interbank Offered Rate (Euribor) is a daily reference rate, published by the European Money Markets Institute, based on the averaged interest rates at which Eurozone banks borrow unsecured funds from counterparties in the euro wholesale money market.

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… but the glide path is not uniform among regions
U.S. growth has outperformed investor expectations and other markets, resulting in stickier inflation and interest rates.

• Many global central banks started cutting policy rates in the second half of 2024. As we will explore in this piece, lower policy rates – especially in the absence of recession – have historically led to
improvements in private credit creation and price discovery. In our view, this opens a window for both equity and debt asset classes to fare well in 2025.
• We see different countries and regions as being at different phases in their economic cycles – at least in 2025. Large fiscal and monetary supports have resulted in stickier inflation and interest rates in
the United States; interest rate expectations have risen even in the last few months as economic activity remained strong (left chart). By contrast, the business cycle in places like Canada and Europe
has been less pronounced, resulting in stabler interest rate expectations (right chart). All else equal, we would expect price discovery and deal flow to pick up earlier in the markets with steady
improvements in the cost of capital.

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U.S. rates are slow to normalize, but in part for the “right reasons”
Volatile rates reflect some market concern (U.S. deficit) but also stronger economic activity (inflation).

• Even as policy rates have moved lower, U.S. market rates have been higher and more volatile. Historically, there have been three reasons why market yields move higher: a change in central bank
framework, increases in inflation expectations, or concerns about supply and demand for the government bond. In the case of U.S. rates, recent volatility has been a function of both inflation
expectations and concerns about U.S. deficit spending (left chart) moving higher.
• Upside risks to inflation remain, but we believe that the bar to higher policy rates from here is high. Important for qualified investors: the outperformance of U.S. economic and corporate activity relative
to other large economies (right chart) should create meaningful opportunities for investment in 2025.

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Animal spirits and sponsor pressure make improved deal flow more likely
A change in U.S. political administration has brought uncertainty to the global rates market again; investors are focused on the positive.

• Since the U.S. election, business confidence has improved. The National Federation of Independent Business (NFIB)’s small business optimism index moved sharply higher in the wake of the election
results (left chart). Though small business owners also express concerns about labor supply (more restrictive immigration), higher costs, and operational complexity (tariffs), optimism or “animal spirits”
about potential deregulation, tax relief, and business-friendly conditions are coming out on top. Leading economic indicators, new orders, and public market performance (right chart) have improved.
• At the same time, private equity sponsors are increasingly pressuring fund managers to exit deals, whether to create liquidity, free up capital, or introduce new owners with fresh dry powder1 to support
value creation and growth. Though we do not expect a fully risk-on investor attitude as was seen in 2021, we already see the combination of economic and business optimism and sponsor pressure as
contributing to improving deal flow this year.

1. Definitions are provided at the end of this report.

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Global megatrends are driving capital-intensive investments
Innovation in geopolitics, energy needs, and innovation are fueling real economic activity, driving investment opportunity.

• A powerful combination of global economic and geopolitical events – the COVID-19 pandemic, Russia’s invasion of Ukraine, the rapid rise in computing power of semiconductors, and the increasing
visibility of climate change— has rapidly changed the global economic model. The efficiency of supply chains is no longer as important as the security of, and reliable access to, key materials.
• We believe that the combination of national interest (public funding), corporate leadership (capital expenditure), and universal application (household interest) in these trends will result in durable
investments. Our investors see meaningful opportunity around supply chain re-globalization, building and powering data centers, and providing physical and digital infrastructure to support those trends.
• For the next few years, these transitions are likely to be highly capital-intensive. More materials will be required, potentially resulting in higher prices for those materials (see pages 29-30). This
contributes to our conviction that inflation and interest rates are likely to be higher and more volatile than in the post-global financial crisis era.

U.S. EU China Japan

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Investor allocation to private markets has continued to increase...
In the past, lower-for-longer interest rates drove investor attention to private markets. Now, even amid higher rates, allocation has grown.

• After the global financial crisis, lower rates forced institutional investors to seek yield and higher returns from private markets. In the current environment, interest rates are higher, but allocations
continue to grow. Data on investor allocations suggests that investors have more appreciation of the diversifying benefits of the allocation.

Institutional investors have steadily increased their allocations to private markets…

Institutional investor asset allocations, 2014 - 2023
100%
Private equity
90%
Real estate
80% Infrastructure
Private credit
70%
Multi-asset strategies
60%
Fixed Income

50% Stocks

40%

30%

20%

10%

0%
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Sources: McKinsey, CEM Benchmarking, 2024. Data for 2024 is not yet available.

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… desire for access is driving democratization of private markets, too
Public equity market concentration and the proliferation of private markets knowledge creates interest among more investor types.

• Product innovation in the private markets space has created opportunities for qualified investors to fundraise among a larger set of investors, including night-net-worth investors. Interest in private
markets strategies among these investors has grown in part due to its historically high return and low volatility profile (though infrequent mark-to-market policies contribute to this expectation).
• However, several trends in public markets have also contributed to this dynamic. In equity, for example, fewer and fewer companies are listed for public shareholding (left chart). In recent years, as
large-cap technology stocks have outperformed the index, equity market concentration – both geographically (middle chart) and strategically (right chart) – has increased. These dynamics give
investors the perception that the public markets do not provide as diverse an opportunity as they used to, nor do they provide efficient access to the “main street” or early-stage opportunities. A
• As a result, we have seen an increase in investor curiosity about and allocation to the private markets as an opportunity to diversify their equity holdings. This includes access to the “main street”
opportunities for value creation that the middle market and lower middle market provide.

Company ownership has moved

steadily from public to private
markets
U.S. public companies U.S. private companies

9958

7000

4805

2000

2000 2021
Sources: New York Life Investments Global Market Strategy, PitchBook,
Amundi, CREATE Research, January 2025.

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GLOBAL PRIVATE MARKETS OUTLOOK

Asset class views

PRIVATE EQUITY PRIVATE CREDIT REAL ESTATE REAL ASSETS

PRIVATE EQUITY PRIVATE CREDIT REAL ESTATE REAL ASSETS

Summary
Our key takeaways per asset class are explored in depth throughout this section.

Private equity Private credit Real estate Real assets

• We see 2025 as a major turning point for • During a turbulent time, private credit has • The early phase of countries’ rate-cutting • In our view, global transitions towards
U.S. private equity. Buy-side activity is finally been a relative bright spot, topping private cycles may kickstart a generational digitization, electrification, and supply chain
rebounding after two years of anemic asset classes in terms of fundraising growth, opportunity in real estate allocation. A re-globalization are likely to increase demand
fundraising and distributions. Exits improved increases in assets under management, and normalizing yield curve tends to signal the for real assets.
strongly in the second half of 2024, performance. largest range in debt and equity opportunities
• We believe this demand may come through
kickstarting the process to bring investors for private investors.
• Resilient economic activity and modestly at least two channels. The first is a physical
liquidity and enable reinvestment.
lower interest rates support confidence in • Europe has seen more price discovery need for commodities and materials to build
• Fundraising has been concentrated in large credit performance for 2025. Leverage may already. While the U.S. may see more the infrastructure required to fuel these global
and mega funds, creating an opportunity for rise as the economic cycle extends, driving volatility, especially in office space, we megatrends. The second is that this capital-
middle market and lower-middle market our focus on credit quality. believe the bottom is in for many sector intensive stage in the global economic
managers to sell upmarket. valuations. In our view, this means a market environment may lead to higher inflation and
• In the event of a more significant economic
timing opportunity in equity may be arising. interest rate volatility. Historically, real assets
• Moderate interest rate levels and higher slowdown, the direct relationship between
have outperformed during periods of higher
expected macroeconomic volatility likely borrowers and lenders in private credit may • Investors have often focused on disruptions
inflation and interest rate volatility.
mean that private equity funds will need to allow funds in this space to navigate risks to office space related to work-at-home
implement effective value-creation initiatives more fluidly. This appears to be even more adjustments. But similar disruptions are • Despite higher valuations in the foundational
to grow company profits. the case for the middle market. Historically driving higher rents in other sectors. layer of megatrends like AI, valuations for the
speaking, default rates for middle-market Environmental improvements, better inputs to these investment processes have
• New sources of liquidity have emerged over
private companies have been lower and amenities, and strong demand related to not seen as much uplift. We believe that
the last few years that we believe provide
recovery rates have been higher when secular changes (e.g. demand for data attractively priced assets with cash-flow-
private equity investors with diversified
compared to similar asset classes. centers warehousing, and logistics) create generating properties may provide return
opportunities to generate liquidity, creating
opportunities in our view. generation and diversification potential.
more stability for the space.
Investor approach: We typically discourage trying Investor approach: Opportunities related to global
Investor approach: Capture the benefits of higher Investor approach: Investors who can play across
to time the market, but 2025 and 2026 are likely transitions (digitization, electrification, supply
yield in both U.S. and European direct lending. the capital stack, risk spectrum, and geographies
to provide strong vintages for private equity chain re-globalization) have become clear.
We favor the middle market and lower-middle can potentially capitalize on market disruption.
investors. Focus on markets with supply-demand Diversify a private portfolio by considering the
market due to their historical relative safety. Focus on sectors experiencing secular demand.
dynamics that enable high investment selectivity. natural resources inputs to that process.
Opinions of New York Life Investments, 2025.

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 PRIVATE CREDIT

PRIVATE EQUITY PRIVATE CREDIT REAL ESTATE REAL ASSETS

Private equity: the exits “flywheel” is finally spinning

Exit activity has finally improved, kicking off the virtuous cycle that allows limited partners to reinvest.

• By the end of 2024, the slow-moving credit crunch in private markets had abated, and U.S. private equity activity achieved its long-awaited recovery. In the first three quarters of the year, exit count was
thin, as transaction values were larger rather than more frequent. By Q4, however, transaction volume had improved (left chart).
• As we will explore in later pages, dealmaking has not yet caught up with exits. Stunted activity has been driven by private equity sellers unwilling to let go of their assets for what they see as an
undervalued price relative to recent history. At the same time, buyers are skeptical of multiples compared to 2021 or 2022 conditions when interest rates were lower.
• Until the air pockets in dealmaking and fundraising are resolved, private equity is not out of the woods. But exits are the “flywheel” of the process, creating liquidity for limited partners and creating space
for new deals and fundraising. We are optimistic that 2025 will see a continuation of this trend.

After two challenging years, private equity exits began improving in 2024 “Higher for longer” interest rates contributed to an increase in portfolio company hold
times. This trend may unwind as exit activity improves
U.S. private equity exit activity Median private equity company hold times (years)
Exit value Exit count Estimated exit count Median exit holding times (annual)
Median exit holding times (cumulative)
Median existing holding times
1,907
8.0
7.0

Median number of years

1,501 7.0
Exit value ($B)

1,446 1,417
1,336 1,344 1,342

Exit count
1,300 1,274 1,287 6.0 5.9
1,228 5.4
5.0 5.4
4.0
4.0 4.1

3.0
2.0
$379.1 $347.0 $321.0 $364.1 $385.4 $301.2 $433.2 $840.7 $302.2 $277.3 $413.2 1.0

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0.0
2006 2008 2010 2012 2014 2016 2018 2020 2022 2024
Sources: New York Life Investments Global Market Strategy, PitchBook, as of December 31, 2024. Sources: New York Life Investments Global Market Strategy, PitchBook, as of December 31, 2024.

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 PRIVATE CREDIT

PRIVATE EQUITY PRIVATE CREDIT REAL ESTATE REAL ASSETS

Deal flow is likely to improve, but at what valuations?

Activity and price discovery should accelerate in 2025. We expect lower valuations, and favor segments of the market with more choice.

• Private equity valuations remain high (left chart). One reason for these resilient valuations is that, in recent years, macroeconomic uncertainty has limited transactions to high-quality assets. Another
reason is that the bid-ask spread between buyers and sellers, especially for mid- and lower-quality assets, has not yet compressed; sellers are reluctant to accept lower valuations, while buyers are
skeptical of valuations posted when interest rates were a few hundred basis points lower.
• In our view, improvements in exit activity, sponsor pressure, economic optimism, and lower interest rates are already boosting deal activity for 2025. The question is: how much activity is yet to come,
and at what valuations? As deal activity broadens, for example, that broadening will inevitably include lesser-quality companies, and overall EBITDA multiples may fall. This can still be a very healthy
market, and contribute to improvements in deal flow.
• When it comes to the macroeconomic environment, investors are caught between optimism (reduced red tape) and concern (uncertainty around tariffs and immigration), but they share a conviction that
the bar for interest rate hikes from this point is very high. Lower base interest rates relative to a year ago help reduce financing costs and bring buyers’ and sellers’ valuation expectations closer in line.
• Amid market changes and potentially lower valuations, we favor markets with more choice. In our view, the much larger opportunity set (see page 34) in the middle market and lower middle market
presents an outsized opportunity to add value at the right price.

Valuations in the private equity buyout universe have moved higher… … whereas valuations for smaller deals remain more attractive.
Median U.S. private equity buyout EV/EBITDA multiples Valuation ratio: total enterprise value (TEV) / EBITDA

16.0x 14.1x 2003-

TEV 2020 2021 2022 2023 YTD 2024 Total
12.7x 12.7x 2019
Median EV/EBITDA multiples

14.0x 11.9x
11.6x 11.6x 11.7x
12.0x 10.2x 10.4x 10 – 25 5.8 5.9 6.1 6.4 6.0 6.4 5.9
9.2x 9.5x
10.0x
25 – 50 6.5 6.7 7.3 7.0 7.0 6.7 6.7
8.0x
50 – 100 7.5 8.0 8.3 8.5 8.0 8.5 7.7
6.0x
4.0x 100 – 250 8.2 8.7 9.3 9.1 9.6 8.2 8.5
2.0x 250 – 500 9.0 10.4 10.9 10.1 10.7 9.5 9.9
0.0x
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Total 6.6 7.0 7.5 7.5 7.2 7.1 6.9
Sources: New York Life Investments Global Market Strategy, PitchBook, January 2025. Enterprise value (EV) is a measure Sources: Apogem, GF Data, data available through November 2024 and accessed January 2025.
of a company’s total value. EBITDA is earnings before interest, tax, depreciation, and amortization.

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 PRIVATE CREDIT

PRIVATE EQUITY PRIVATE CREDIT REAL ESTATE REAL ASSETS

Fundraising has slowed and still favors large funds

We see the accumulation of private equity dry powder in large and mega funds as a potential boon for smaller funds to sell upmarket.

• Despite improvements in exit activity at the end of 2024, fundraising slowed substantially (left chart), likely due to political and economic uncertainty ahead of the U.S. election, as well as limited
distributions from existing investments to fund re-ups. We expect this trend to stabilize or even reverse in 2025, driven by already-accelerating exit activity and optimism about the business, interest rate,
and economic environment.
• Where fundraising has been successful, it’s been concentrated in large and mega funds (right chart). Dry powder in these funds now accounts for 44% of total private equity dry powder. While this is
seemingly positive for asset gatherers, these markets continue to see intense competition for the limited number of deals trading in the current environment, driving up multiples.
• We view the size and concentration of dry powder as a potential positive for middle market private equity, as it indicates that there is less competition in the space, and more capital up-market for
companies to exit into. As deal volume resumes, investors may find a modest period in which a relatively lower volume of capital can be deployed in an increasing number of deals.

Private equity fundraising activity has slowed… … and persistently favors large and mega funds.
U.S. private equity fundraising activity Share of U.S. private equity capital raised by size bucket 44% of
Capital raised, lhs Fund count, rhs fundraising was
100%
$450 1,000 1,100 concentrated in

Percent of U.S. PE capital raised

90% large and mega
$400 1,000
funds, the
Capital raised, USD $ billions

900 80%
841 potential buyers
$350
800 70% of middle market
686 companies.
$300
700 60%

Fund count
$250 516 460 533 542 600 50% $5B+
416 424 500
$200 405 40% $1B-$5B
311 400 $500M-$1B
$150 30%
300 $250M-$500M
$100 20%
200 $100M-$250M
$149

$143

$185

$257

$208

$352

$273

$377

$399

$395

$285
$50 100 10%
<$100M
$0 0 0%
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Sources: New York Life Investments Global Market Strategy, Pitchbook, as of 31 December 2024. Sources: New York Life Investments Global Market Strategy, Pitchbook, as of 31 December 2024.

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 PRIVATE CREDIT

PRIVATE EQUITY PRIVATE CREDIT REAL ESTATE REAL ASSETS

Traditional sources of liquidity may be peaking, but overall liquidity is very strong
Traditional sources of liquidity are ample, and long hold times have contributed to the development of new, reliable sources of liquidity.

• After more than a decade of growth in liquidity, private equity dry powder has now stabilized and even edged lower (left chart). However, we believe dry powder levels are ample to keep this traditional
source of market liquidity intact. Corporate buyers are holding larger stockpiles of cash as well. We believe these buyers will be motivated to put capital to work as the M&A environment normalizes.
• Among new sources of liquidity (right chart): The secondary market has expanded rapidly over the last decade, driven by LPs using it to manage private market exposure, providing greater portfolio
control and liquidity. This also helps ensure secondary investors benefit from a consistent deal flow, untied to downturns. GP-led secondary transactions, particularly continuation vehicles (CVs), have
increased as they allow GPs to retain key assets while offering LPs liquidity or the option to reinvest. While investors may assume that a now-recovering M&A environment might curb CV growth, we
believe CVs are now an established exit strategy, much like traditional routes, given their growing familiarity and utility during slower deal cycles.
• In addition, many private equity funds have focused on strategic add-ons to grow companies. This strategy has become particularly attractive when managers can grow existing platforms with
management teams they know rather than risking acquisition of a new platform. Add-on deal activity has been relatively resilient in the current environment, which offers a path to exit for companies
even in a challenging environment. For larger private equity-backed companies, target add-on opportunities may be the portfolio companies of smaller (i.e., middle market or lower middle market) funds.

Traditional sources of liquidity, such as dry powder, may have peaked but remain very Newer source of liquidity, such as using the secondary market or add-on deals for new
high relative to historical levels. growth capital, are still growing.
US private equity Dry Powder ($B)
75% increase 75% +
$1,200 in annual secondary volume of new PE deals are add-ons
$1,003 $1,024 $1,007
$1,000 $901 US$ billions Deal count
$819 2024 2018 2024
$752 2023
$800
$654 2022 *$130 4181
$593 Dry powder 2021
$600 3278
$471 by vintage 2020
$424 2019 $74
$351
$400 2018 1787
1466
2017
$200

$0
2018 2024 Add on New platform
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024*
Source: New York Life Investments Global Market Strategy, PitchBook, *data available through 6/30/.2024, accessed Source: Greenhill, “Global Secondary Market Review, H1 2024.” Source: PitchBook, January 2025, data available through December
January 2025. *130 billion is an estimate for the full year. 31, 2024.

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PRIVATE EQUITY PRIVATE CREDIT REAL ESTATE REAL ASSETS

PRIVATE EQUITY PRIVATE CREDIT REAL ESTATE REAL ASSETS

Private credit: lower-but-not-low interest rates create a sweet spot in our view
Private credit’s risk-return characteristics remain , in our view, well-suited to the current environment.

• In the last 15+ years, allocation to private credit has grown as (1) bank regulation resulted in banks stepping back from loan making, and (2) “lower for longer” interest rates encouraged more asset
allocators to learn about the asset class. Private credit loan volume surpassed the broadly syndicated loan market in 2018, with market share expanding more rapidly in the COVID and high inflation
environments of the last few years (left chart).
• Despite the growth in commitments to private credit over time, investors remain underweight in this asset class relative to their targets. In fact, the allocation gap has only grown wider in recent years, in
contrast to other private asset classes, suggesting investors may commit even more new capital to the asset class just to reach their current target.
• In our view, normalizing interest rates could be the “sweet spot” for private credit. Namely, interest rates have moved lower across many global economies (right chart), reducing pressure on borrowers
and potentially extending the economic cycle. (We explore credit health more on the next page). That said, lower interest rates are not low by historical standards, preserving the yield generation
potential for investors. In our view, the built-in security derived from debt’s privileged position in the capital structure also appeals to investors who are wary of market volatility and valuation uncertainty.

Private credit has consistently expanded market share over the past decade Direct lending yields remain elevated, compensating investors well
for any risk taken, in our view
Annual middle market sponsored lending loan volumes Direct lending yields and spreads

Broadly Syndicated Private Credit 14% Middle-market unitranche spreads Middle-market unitranche yield
160
140 12%
Loan volume ($ in billions)

120 10%

100 8%
80 6%
60 4%
40
2%
20
0%
0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
2018 2019 2020 2021 2022 2023 2024
Sources: Apogem, New York Life Investments Global Market Strategy, LSEG LPC’s Q4 2024 US Sponsored Middle Market Private Deals Analysis. Sources: New York Life Investments Global Market Strategy Team, LSEG LPC, Q4 2024.
Compares middle market sponsored broadly syndicated loans to middle market sponsored broadly direct lending.

FOR INSTITUTIONAL USE ONLY. NOT FOR USE WITH THE GENERAL PUBLIC. 21
PRIVATE EQUITY PRIVATE CREDIT REAL ESTATE REAL ASSETS

PRIVATE EQUITY PRIVATE CREDIT REAL ESTATE REAL ASSETS

Healthy credit at normalizing interest rates is likely to extend the economic cycle
Sticky U.S. rates and a recovering leveraged loan market point our investors toward a focus on middle- and lower-middle market credit.

• Resilient economic activity and modestly lower interest rates support confidence in credit performance for 2025. However, an extended economic cycle and lower rates could increase leverage over
time and pressure companies struggling with sticky rates. Additionally, rising capital in private credit and increased competition have led to a deterioration in terms in some cases. While this may not
signal higher default rates in this cycle, it could challenge future recoveries relative to historical levels. This combination points confidently to healthy private credit deployment but emphasizes the need,
in our view, for a strong focus on credit quality and proven manager capability across economic cycles.
• Over the course of 2024, banks re-engaged in the broadly syndicated loan (BSL) market. According to PitchBook, by year-end 2024, syndicated LBO loan volumes doubled to $60.3 billion from a low
base of $30.7 billion in 2023. This could be viewed as increased competition for deals in the private credit space, but we see two important caveats to that perspective. First, these volumes remain
58.7% below the 2021 peak and 40.5% shy of the three-year pre-pandemic annual average. Second, the BSL market tends to be focused on deals for larger private equity funds. In our view, this
indicates that competition in the middle- and lower-middle market is likely to be less robust, while simultaneously supporting the exit market for companies exiting to larger private equity firms (page 34).

United States: credit remains remarkably healthy Europe: credit demand has fully recovered Banks are re-engaging in the BSL market
Quarterly BSL-funded loan value ($B) to private equity
borrowers by type
$70

Loan value (US$ billions)

$60
$50
$40
$30
$20
$10
$0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2022 2023 2024

LBOs & add-ons Refinancings

Source: New York Life Investments Global Market Strategy, PitchBook, January 2025.

FOR INSTITUTIONAL USE ONLY. NOT FOR USE WITH THE GENERAL PUBLIC. 22
PRIVATE EQUITY PRIVATE CREDIT REAL ESTATE REAL ASSETS

PRIVATE EQUITY PRIVATE CREDIT REAL ESTATE REAL ASSETS

We believe private credit is well positioned to weather any upcoming economic storm
Flexibility between borrower and lender can provide flexibility in troubled times. This has historically been truer in the middle market.

• Direct lending is a long-term investment, with funds often targeting 5, 7, or even 12 years of invested capital. Changes in the macroeconomic environment and the arrival of unexpected risk are likely to
occur in those time frames. As a result, underwriters work to understand a borrower’s demand drivers, cost structure, and sensitivity to the impacts on those drivers. This deep understanding of a
borrower’s creditworthiness helps not only in making the proper security selection and investment structure, but also in the ability to take a proactive stance in supporting borrowers when risks arise. The
capital structure, collateral, and covenants that our investors require create room for the risks that arise.
• In the event of a more significant economic slowdown, private credit may be able to navigate the environment more fluidly because the direct relationship between borrowers and lenders can provide
higher flexibility. This appears to be even more the case for the middle market. Historically speaking, default rates for middle-market private companies have been lower, and recovery rates have been
higher when compared to similar asset classes.

Historically, middle market default rates have been lower and recovery rates have been Covenant-lite loans are not prevalent in direct lending deals.
higher when compared to similar asset classes.
% of new deals issued over the last 12 months
Default rate %, 1995-2019 Recovery rates %, 1995-2019
100%
Middle market had a
4.0% 90% higher rate of recovery
Middle market 80% 90%
3.70% 80%
had fewer
defaults 3.50% 70% 80%
3.0% 75%
60% 60%
2.50% 50%
2.0%
40% 40%
30%
1.0% 20% 20%
20% 22%
10%
0.0% 0% 0%
Middle market Broadly syndicated High-yield bonds Covenant-lite direct loans Broadly syndicated loan market
Middle market Broadly syndicated High-yield bonds

Sources: Mercer S&P Credit Pro, 2021. The “middle market” and “broadly syndicated” market default and recovery rates are calculated by S&P Global Sources: J.P. Morgan Investment Bank, data as of 2024, accessed January 2025. Covenant-lite or “cov-lite” loans refer to loan agreements that do not
Market Intelligence research. High yield bonds are defined by the S&P U.S. High Yield Corporate bond index, which is designed to track the contain the usual protective covenants for the benefit of the lending party.
performance of U.S. high yield corporate bonds. Past performance is not indicative of future results. An investment cannot be made in an index.

FOR INSTITUTIONAL USE ONLY. NOT FOR USE WITH THE GENERAL PUBLIC. 23
PRIVATE EQUITY PRIVATE CREDIT REAL ESTATE REAL ASSETS

PRIVATE EQUITY PRIVATE CREDIT REAL ESTATE REAL ASSETS

Real estate: cost of capital leads activity, but structural factors create opportunity
Differences in market interest rates are a major influence in relative deal flow, but price discovery has begun globally.

• The cost of capital remains the single biggest issue impacting commercial real estate (CRE) deal activity. In our view, differences in the rates normalization process bring different types of opportunities
across geographies.
• In Europe, slowing growth and inflation have led to more consistent expectations for the interest rate cutting cycle; long-term bond yields have fallen, reducing pressure on CRE valuations.
• In the U.S., despite 100 basis points in policy rate cuts, concerns about inflation and fiscal spending have kept long rates stubbornly high. Still, there has been meaningful price discovery in the U.S> real
Estate market. Since February 2020, Green Street’s Commercial Property Price Index (CPPI) has declined by 37.9% in the office sector and 10.5% in the mall sector.1
• At the same time, structural changes related to demographics, regulation, and changes in sector supply and demand have created opportunities across CRE markets. We explore our geography-
specific high conviction ideas in this section.

Price discovery has begun across geographies CRE opportunities are driven by more than rates
Green Street Commercial Property Price Indices (2007=100) Factor Description
170
Higher interest rates directly influence capitalization rates (cap rates) both by reducing a
160 Cost of
property’s current market value and by increasing its operating cost through higher
150 capital commercial mortgage rates.
140
Slowing economic activity tends to reduce investor optimism for real estate. Longer-term
130 Credit
economic trends related to re-globalization, energy independence, and digitization can create
120 quality counter-cyclical demand.
110
Real estate asset performance can be directly driven by national and localized factors such as
100 Regulation rent control, environmental mandates, zoning, and transfer tax policies.
90
The rising cost of materials and labor (including for construction or renovation and operating
80 Europe US Rising
costs) and capital expenditure (via higher interest rates) increases real estate operator’s costs,
70 costs reducing net operating income.
60
Property values may be impacted by other trends such as an investor flight to quality, lease
50 Sector-
timelines, specific supply and demand factors, remote and hybrid work, and the trend towards
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 specific e-commerce.

Source for left chart: Tristan Capital Partners, Green Street, January 2025. Source for right table: Opinions of NYL Real Estate Investors, 2025. Capitalization or “cap” rates are calculated by dividing a property’s net operating income by its current market value. 1. Green Street CPPI: Green Street’s Commercial
Property Price Index is a time series of unleveraged U.S. commercial property values that captures the prices at which commercial real estate transactions are currently being negotiated and contracted. Features that differentiate this index are its timeliness, its emphasis on high-quality properties, and its ability
to capture changes in the aggregate value of the commercial property sector. It is not possible to invest in an index. Data through December 2024.

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PRIVATE EQUITY PRIVATE CREDIT REAL ESTATE REAL ASSETS

PRIVATE EQUITY PRIVATE CREDIT REAL ESTATE REAL ASSETS

Europe: rates normalization has created investment opportunity

Calling the bottom in the markets is challenging, but central bank interest rate cuts are a powerful signal.

• Rate cuts have historically contributed to a normalizing the yield curve and improvement in private-led credit supply; this trend is so far holding in this economic cycle (left chart).
• Since business cycles in the euro area and the United Kingdom have been less pronounced than those in the U.S., the yield curve normalization process has been more straightforward so far in this
cycle. Yield curve normalization and the credit cycle have begun improving. This is typically a signal that deal activity in European real estate is re-generating. This is so far playing out in valuations
(right chart), which appear to have bottomed out.

Yield curve normalization has coincided with improvements in credit creation European commercial real estate valuations appear to have bottomed out

European CRE market cycle (peak to date)

0%
Non-listed CRE
-5% (INREV)

-10% Green Street CPPI

(Market Index B-
Quality Asset In
-15% Core Market)
Listed CRE
-20% (GPR250,
Unlevered)

-25%

-30%
1 2 3 4 5 6 7 8 9 10 11 12
Quarters
Sources: Tristan, INREV, Green Street, GPR, January 2025. Definitions are found at the back of this document.

FOR INSTITUTIONAL USE ONLY. NOT FOR USE WITH THE GENERAL PUBLIC. 25
PRIVATE EQUITY PRIVATE CREDIT REAL ESTATE REAL ASSETS

PRIVATE EQUITY PRIVATE CREDIT REAL ESTATE REAL ASSETS

Europe: key themes for investing

Our investors are focusing on opportunities where disruption creates space for value-add.

Macro dynamics of recovery Exploit equity and credit opportunities High conviction themes
as the cycle bottoms out

• Long term rates have normalized as the economy has • Target thematic “growth strategies” trends that are • Digital infrastructure and artificial intelligence (AI)
slowed and the ECB loosens policy. Financial poised to deliver significant excess return, and, specifically, the energy-hungry data centers that sit
conditions have also eased but rates may remain high particularly those where demand is growing rapidly and at the hub of this ecosystem will drive new demand that
relative to post-global financial crisis standards outrunning supply, represented in our high conviction will outrun supply by a significant margin
ideas in the right-most column
• Lower-but-not-low rates, especially without a recession, • Demographic-led change across all elements of living,
suggest that real estate equity and credit could • Embrace secular changes in markets to find new and including hospitality
perform well at the same time, in our opinion exciting allocation opportunities in the least efficient
parts of the CRE market • Re-globalization is driving even more demand for
• Our investors are already seeing an improvement in logistics/light industrial and manufacturing
credit & equity flows as normalization supports credit • Play into the rapid evolution taking place in private
supply. Transaction activity will follow as unallocated CRE credit and also scaling portfolios in operational • Innovation is “coming home”– driving demand for data,
capital gets to work real estate strategies life science, tech manufacturing and research and
development (R&D) assets that meets new needs for
• Make the most of the cycles as we move into a recovery. power and/or security
Leaning into opportunities to provide capital to
owners of high-quality CRE investments & exploiting • The more visible impacts of climate change and the
motivated sellers by capitalizing on uncertainty, associated demand for energy efficiency are driving
stress & dislocation the need for upgrades/improvements to meet net-zero
carbon targets, impacting all sectors and a major
determinant of success in office
Source: Opinions of Tristan Capital Partners, 2025.

FOR INSTITUTIONAL USE ONLY. NOT FOR USE WITH THE GENERAL PUBLIC. 26
PRIVATE EQUITY PRIVATE CREDIT REAL ESTATE REAL ASSETS

PRIVATE EQUITY PRIVATE CREDIT REAL ESTATE REAL ASSETS

United States: price discovery underway, deal flow shows signs of strengthening
Disperse valuations reflect price discovery still to come, but improving deal flow signals this process may be getting underway for 2025.

Valuations vary based on index methodology and may not yet reflect market Transaction volume showed early signs of life at the end of 2024
developments
Quarterly Transaction Volume by Property Type ($ billion)
Appraisal and repeat-sale indices lag public market proxy Retail
Commercial real estate value indices, all property types $345
Industrial
Office $38
40%
Apartment
35%
$84
30%
% index value growth from 2020

25% NCREIF MVI

+21% since pre-Covid $197 $203
20% $57
-12% below Q3 2022 peak $20 $175 $29 $170
15% $157 $25
RCA CPPI $152 $45 $43
$22
$143 $21 $14 $139 $141
10% +13% since pre-Covid
-12% below July 2022 peak $127 $16 $120 $15 $42 $39 $18
$18 $37 $14 $43 $30
$114
5% $99 $42 $96 $34 $41 $14
$12
$20
$34 $10 $35 $30 $47 $81 $84 $82 $73 $87 $89
$31 $166 $79 $11 $13 $33
0% $18 $42 $71 $23 $28 $11 $16 $13
Green Street CPPI $40 $35 $8 $22 $18 $16 $23 $25
$29 $31 $47 $21 $23 $24 $24 $25 $21
-5% -6% since pre-Covid $90 $101 $21 $19 $12 $14
$6 $79 $14 $11 $16
-18% below April 2022 peak $13 $15 $64 $61 $73 $12
$50 $57 $54 $16
$48 $41 $13 $41 $45
-10% $39 $28 $27 $32 $33 $28 $22 $41 $38
$16

-15% 19Q1 19Q3 20Q1 20Q3 21Q1 21Q3 22Q1 22Q3 23Q1 23Q3 24Q1 24Q3
2020 2021 2022 2023 2024

Source: Strategy and Research Group of NYL Real Estate Investors, January 2025. NCREIF Market Value Indices (MVI) quarterly data available Source: Strategy and Research Group of NYL Real Estate Investors, MSCI Real Assets, January 2025, with data available through Q4 2024.
through Q4 2024; MSCI Real Capital Analytics Commercial Property Price Index (CPPI) monthly data available through December 2024. Green Street
Commercial Property Price Index (CPPI) monthly data available through December 2024.

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PRIVATE EQUITY PRIVATE CREDIT REAL ESTATE REAL ASSETS

PRIVATE EQUITY PRIVATE CREDIT REAL ESTATE REAL ASSETS

United States: key themes for investing

A stabilizing macroeconomic backdrop, recalibrating investor expectations, and increasing liquidity needs drive 2025 optimism.

Macroeconomic backdrop Cyclical themes Long-term convictions

• We expect transaction activity in 2025 to exceed the • In equity: where good sponsors, or investors with • There are major demographic trends impacting the
prior year as market participants become resigned to otherwise good assets, are facing a challenged capital economy and CRE, including:
higher long-term rates. stack, investors can consider providing liquidity.
• a stagnant-to-declining working age population
• After CRE fundamentals softened across the U.S. and • In credit: banks are still on the sidelines. Careful
• recent unprecedented immigration (and possibly
vacancy rates ticked upward in all of the major property lenders can, therefore, potentially take advantage of
the curtailment or even the reversal of the same)
types except retail in 2024, we expect a more positive higher interest rates and lower valuations.
outlook in 2025 as construction slows, space gets • domestic migration to the Sunbelt and the
absorbed, the economy improves, and positive • Sourcing: managers with strong relationships may be Intermountain West
demographic trends become more entrenched. able to source deals off-market where they are not
• inter-metro migration from the urban core to the
competitively bid, improving return potential.
suburbs and exurbs
• As values recalibrate and lenders’ and owners’ needs
for liquidity mount, generationally attractive investment • Bottom line: investors who can play across the risk • the astounding number of remote workers
opportunities are beginning to manifest. We believe this spectrum and up and down the capital stack may see
• the great number of people living alone
dynamic should accelerate in 2025. Certain sectors in meaningful opportunities across real estate asset
particular markets may have reached their valuation classes in the coming quarters. Higher rates have led to • the aging population and the increasingly
troughs for this real estate cycle. a stronger focus on real estate credit in recent years, but lopsided ratio of retirees to workers.
as prices bottom – which is already happening in several
real estate sectors in our view – investors will likely have • Discerning CRE investors and developers can capitalize
more conviction about equity investing as well. on these major trends.

Source: Opinions of NYL Real Estate Investors, 2025.

FOR INSTITUTIONAL USE ONLY. NOT FOR USE WITH THE GENERAL PUBLIC. 28
PRIVATE EQUITY PRIVATE CREDIT REAL ESTATE REAL ASSETS

PRIVATE EQUITY PRIVATE CREDIT REAL ESTATE REAL ASSETS

Real assets: global megatrends drive higher, consistent demand for natural resources
Global transitions towards digitization, electrification, and supply chain re-globalization are capital and resource intensive.

• The ongoing economic and political transitions toward electrification, digitization, and supply chain re-globalization are not new, but they are increasingly central to investment opportunity.
• These developments have brought together several ingredients common among durable investment trends: leadership in the space drives spending; public funding, due to the threat of being left behind
in the global economy, is a global trend; and among consumers, the use of digital tools promises to be nearly universal. This combination of factors is likely to drive sustained public and private demand
for real assets. In our view, the scale of these shifts will require a size and consistency of capital dedication that the world has not often seen outside of wartime.
• Already, these trends have driven higher utilization rates and capacity expansion for many businesses, increasing the scarcity value of those assets and mitigating potential cyclicality.

Digitization will require extensive new power supply Energy transition will require extensive materials
The International Energy Agency (IEA) estimates global electricity consumption of data centers could double to Raw materials production may not be sufficient to achieve an energy transition with current technology.
1000TWh by 2026, roughly equal to adding the electricity consumption of Germany in just a few years. Half of Innovations in processing and recycling will be essential to meet global needs in the coming decades. In the
this expansion could take place in the U.S. and China. meantime, materials demand appears poised only to increase.

Data center power use and share in total national electricity demand A sharp increase in demand is projected for metals required to fuel the
500 12% energy transition 2022 2050(proj)
Data center share in total electricity demand (right axis)
Data center electricity use, TWh

Share in total demand

10% Nickel 2934 6508
400

8%
300 Lithium 130 1209

6%
200 Cobalt 171 525
4%

100
2018 2% Copper 25502 39740

2020 2030 2020 2030 2018 2030 2030

0 0%
0% 20% 40% 60% 80% 100%
United States EU China Japan
Sources: New York Life Investments Global Market Strategy, International Energy Agency, CBRE Investment Management, European Commission, Sources: New York Life Investments Global Market Strategy, U.S. Energy Administration, International Energy Outlook 2024.
China's State Council, Japan Science and Technology Agency, S&P Global, U.S. Energy Information Administration, June 2024. TWh = terawatt
hours of electricity.

FOR INSTITUTIONAL USE ONLY. NOT FOR USE WITH THE GENERAL PUBLIC. 29
PRIVATE EQUITY PRIVATE CREDIT REAL ESTATE REAL ASSETS

PRIVATE EQUITY PRIVATE CREDIT REAL ESTATE REAL ASSETS

Natural resources valuations may not yet reflect global demand

Global megatrends are taking off, but the real assets required to support them are still attractively valued in our view.

• In the post-pandemic period, investors have become more attuned to the megatrends described on the previous page. And, over the course of 2023 and 2024, public and private markets began to
reflect the early stages of capital investment in those areas of the market.
• To give a concrete example: as ChatGPT brought more attention to the use cases of generative artificial intelligence (AI), public equity valuations began to reflect enthusiasm for the foundational layer of
that technology – the data structures, algorithms, and chipmakers necessary to propagate demand. As those foundational companies developed their capabilities, it became clear that more digital and
energy infrastructure – including raw materials and servicers of those capabilities – would be required to fuel growing AI demand.
• AI is merely one example of an investment megatrend that is broadening as investors realize its potential. Supply chain re-globalization and electrification are experiencing similar developments.
• Our research suggests that this broadening of investment capabilities is still in its early stages. The application layer has been explored (for example, by corporations experimenting with AI use cases),
but has not yet truly broadened. And though some aspects of infrastructure development have expanded thanks to these megatrends, their energy and materials inputs have not yet seen valuation
expansion.

Sector and value chain diversification offers the potential to mitigate unforeseen short- Energy and materials companies are trading at attractive valuations
term volatility and longer-term cyclicality
Energy Metals & Mining Services
P/E ratio by sector for listed companies
Sector

Our investors’ convictions:

41.0x • Energy, natural resources, and
associated services and
• Oil • Base • Data & technology infrastructure are misunderstood on
Focus

• Natural gas • Industrial • Cost reduction a global basis

• Liquids • Precious • Operational enhancement 27.5x
• Minerals • Rare / specialty • Patented products 24.5x • The industry is starved for capital
17.1x • The energy transition will take time
Agriculture Energy transition Infrastructure
Sector

14.5x and create investment opportunity

• The world needs reliable energy at
the lowest cost possible
• Agtech • Electrification • Power generation
Focus

• Crops • Carbon • Midstream / transmission

• Protein / Nutrition • Storage • Terminal connectivity
U.S. private Energy Materials S&P 500 Information
• Efficiency / optimization • Wind / solar • Water-related assets
equity technology
Source: Apogem, 2025.
Source: Apogem, New York Life Investments Global Market Strategy, Bloomberg, January 2025. The price-to-earnings (P/E) ratio measures a
company's current share price relative to its per-share earnings. Each sector valuation is calculated using the associated Bloomberg S&P 500
sector index; further definitions are at the back of this document.
FOR INSTITUTIONAL USE ONLY. NOT FOR USE WITH THE GENERAL PUBLIC. 30
GLOBAL PRIVATE MARKETS OUTLOOK

High conviction
A global case for investing in the lower middle market
We believe the lower middle market presents a global private opportunity
Investors may benefit from focusing on less efficient parts of the market; this lower middle market is one such opportunity in our view.

• Private markets have reached a considerable $14.5 trillion in size across asset classes. Still, they remain a small portion – just 4% – of the total investable market. At the same time, company financing
trends have shifted. The number of listed companies has fallen from 7000 to 4800 since 2000, and equity market capitalization has become increasingly focused in the United States.
• In response, more types of investors are shifting their focus to private markets, seeking return potential and diversification. We believe investors should focus on areas of the market that are less
efficient, or where return characteristics cannot be as easily achieved in public markets. We see the lower middle market (LMM) of private equity and private credit to be one such opportunity – and one
that is particularly attractive at the capital markets turning point investors may be facing today.

Our case for the lower middle market

What is the lower middle market (LMM)? Benefit Description

• The lower middle market is typically defined as companies The lower middle market offers an attractive supply-demand imbalance, with a large number of potential target
with less than $250 million in enterprise value, or private companies and lower fundraising volume.
equity funds with less than $1 billion in assets under Historically, the supply-demand imbalance for companies / assets has resulted in attractive entry valuations, with
management. The middle market is typically larger, with up to Competitive smaller companies trading at a discount to larger companies.
$500 million in enterprise value. Large companies are resiliency
typically those with Deep pools of capital available to potential acquirers, such as corporate strategic acquirers and large/mega private
equity funds, can result in consistent exit opportunities.
$1 billion or more in enterprise value.
The cyclical nature and variability of bank loan volume create the need for private financing in credit markets.
• The number of companies is much larger than it is for large
companies, providing a deeper pool of acquisition Lower middle market funds have historically outperformed larger segments over the long term, including in high
opportunities. interest rate and high inflation environments.
Economic
• Companies tend to be family or founder owned, so resiliency Contrary to common belief, company size explains only 6% of default frequency, whereas higher leverage, which
investment is typically the first institutional capital applied to is a key characteristic of larger funds, is the largest factor explaining expected default frequency.
the company’s business.
Lower middle market, middle market, and large & mega funds can offer diversification benefits and complementary
• Investors can focus more holistically on value creation Portfolio resiliency
exposure when paired together.
through business building, rather than focusing on financial
engineering as is typical in larger parts of the market. Opinions of New York Life Investments, January 2025. For illustrative purposes only.

FOR INSTITUTIONAL USE ONLY. NOT FOR USE WITH THE GENERAL PUBLIC. 32
An attractive supply-demand dynamic (1/2)
Our constructive view on LMM opportunities is driven by a deep pool of companies with limited financing options compared to larger markets.

Debt financing options

Low-leverage Syndicated High yield Private

bank loans leveraged loans bonds debt
Number of companies EBITDA

✓ ✓ ✓ ✓
500–
Large $/€100m+
1,000
caps

5,000–
$/€50–100m

✓ ✓ ✓ ✓
10,000 Middle
market

✓   ✓
25,000– Lower $/€5–50m
50,000
middle market

✓   
100,000–
Small & medium sized enterprises $/€0–5m
300,000
(SMEs)

Sources: Kartesia, Campbell Lutyens, 2025. Estimates for the number of companies and EBITDA are for either the U.S. or European economies. EBITDA is earnings before interest, tax, depreciation, and amortization.

FOR INSTITUTIONAL USE ONLY. NOT FOR USE WITH THE GENERAL PUBLIC. 33
An attractive supply-demand dynamic (2/2)
Imbalance in the capital raised and number of potential target companies has resulted in attractive entry valuations, historically.

• Large and mega private equity funds hold the majority of private equity dry powder, but there are many fewer large and mega companies to capture that capital demand. By contrast, the middle market,
and especially the lower middle market, have historically had a smaller, stable capital base and a larger number of companies as available targets. This combination has historically resulted in lower
competition, lower relative entry multiples and, in our view, a larger opportunity for adding investor value.

Favorable supply-demand dynamics in the middle market… … drive lower relative entry multiples

North America private equity dry powder by market segment vs. number of potential Purchase multiples by market segment
targets
Large and
1000 mega
250

Number of companies in thousands

900
800 Large and 200
mega >$5B
700
$ in billions

600 Middle and 150

Large 11.1x 9.3x
lower
500 middle number of
11.1x
market potential
400 Middle Smaller, 100
targets
market <$5B stable
300 7.1x
capital
200 base 50
100 LMM <$1B
0 0
Dry powder Potential
Target Companies Large LBOs Middle market LBOs

Sources: Apogem. Data for dry powder comes from PitchBook. Includes U.S. and Canada-based buyout and growth funds. Represents dry powder as Sources: Apogem, PitchBook, GF Data, Jan 2025. Includes average annual purchase multiple for transactions from January 2019 to
of latest data available, 30 June 2024. Accessed January 2025. Data for potential target companies comes from Capital IQ as of December 31, 2023. December 2024. Source for Large Market LBO Purchase Multiples: PitchBook, LCD, “US LBO Debt Quarterly Trend Lines, January 2025.”
Analysis includes estimated number of North American (U.S. and Canada) companies. Middle Market company targets are defined as companies with "Large LBOs“ are defined as transactions > $500M. Source for Middle Market Purchase Multiples: GF Data’s “GF Data M&A Report
$5 million to $250 million in revenues. Large and mega company targets defined as companies with > $250 million in revenues. November 2024.” Includes an average of transactions from $50 million to $500 million.

FOR INSTITUTIONAL USE ONLY. NOT FOR USE WITH THE GENERAL PUBLIC. 34
A high-growth market segment of the private capital universe
Lower middle market companies have historically experienced faster growth, providing a compelling potential opportunity.
CHART 1 CHART 2 CHART 3

Lower middle market and middle market companies have … and have historically offered more … resulting in a historical
historically grown faster than larger companies… compelling valuation multiple vs. outperformance of returns compared
large-cap companies... to large-cap buyout funds.

Weighted average change in Weighted average change in Acquisition multiples of middle Middle market IRR outperformance
revenue from entry to exit EBITDA from entry to exit market vs. large-cap buyout funds vs. large-cap buyout funds
100% 93%
16.0
90% 3.1% 3.1%

Acquisition multiples (EV/LTM

80% 75% 14.0 12.6 13.0 13.0 13.0
12.3
70% 12.0
60% 10.0

EBITDA)
50% 8.0
40% 35% 2.7x
6.0 11.20 10.90 10.70 11.50 10.80
30% 26% 2.9x
4.0
20%
10% 2.0

0% 0.0
Large cap Middle market Large cap Middle market 2017 2018 2019 2020 2021
-0.3%
Under $500m $500m+ Series3 1st quartile 2nd quartile 3rd quartile
Sources:
CHART 1: Kartesia, Morgan Stanley Investment Management database of transaction-level information, including only U.S. deals and excluding Morgan Stanley transactions. Represents a sample of portfolio companies that report on EV, Revenue,
EBITDA, Net Debt, Public/Private Company, with data as of June 30, 2023; Morgan Stanley analysis as of September 2023. Given the sample universe and size, there is potential for selection bias. Middle market is defined as transaction value (TEV) of
$500m or less. Sample includes 166 total transactions – 37 large caps and 129 middle market. Analysis excludes outliers.
CHART 2: Kartesia, FactSet data as of 31 August 2022. Represents all announced acquisitions globally. IRR indicates internal rate of return.
CHART 3: Preqin database, retrieved 31 August 2022. Represents query of pooled net fund returns in Cambridge database from new private equity funds closed 1 January 2010 to 31 December 2019 across 653 funds. Net IRR here represents the 75th
percentile (1st quartile), 50th percentile (2nd quartile), and 25th percentile (3rd quartile) of self-reported internal rates of return to the limited partners net of all management fees, carried interest, and other fund expenses.

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Historically, size has been the smallest contributor to company risk
Contrary to common belief, the impact of company size on expected default rate is minor compared to leverage, a key trait of larger funds.

Outperformance potential in periods of low general market return

• Investors have sometimes expressed concern that the lower middle market segment
of private credit and private equity are riskier than other segments. For experienced Factor contribution to loan default frequency
investors, this need not be the case. Opportunities related to investor positioning, the
large universe of quality companies, a relationship-driven market, and attractive yield 6%
(all illustrated in this section) leave us confident in the opportunity for this segment.
9%
• To quantify this view: Moody’s research has identified seven factors that explain 26%
expected loan default frequency (in %, weighing factor identified by Moody’s).
1. Leverage (capital structure): 26% 11%
2. Liquidity: 20%
3. Activity ratio: 15%
4. Debt coverage: 13%
13%
5. Profitability: 11%
20%
6. Growth: 9%
7. Size: 6%
15%
• Size is one of the seven factors, but ranks as the least significant factor, with a weight
of only 6% out of 100%. Leverage Liquidity Activity ratio Debt coverage Profitability Growth Size
• This Moody’s research finding supports the view that lending to small companies is
attractive if one holds the standards high on credit fundamentals. This data set:
• Covers more than 133,000 individual borrowers with over 9,000 defaults
• The report is based on a detailed quantitative study of default history across a large
• Includes borrowers in the lower middle market size range and larger borrowers
data set of borrowers over a time period of 16 years (1994-2010) that includes the
2008 Financial Crisis. • Was provided by large national banks (e.g., Bank of America, Wells Fargo) and regional banks
(e.g., US Bank, Fifth Third Bank, Citizen’s Bank, etc.)

Source: New York Life Investments, Kartesia, Deerpath Capital; Moody’s Analytics RiskCalc 4.0 U.S., April 30, 2012; Campbell Lutyens. The Activity Ratio includes Inventory/Sales, Current Liabilities/Sales, Change in Working Capital/Sales.Debt Coverage defined as EBITDA/Interest Expense.

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Middle market private equity has tended to outperform the market amid risk
In both higher interest rate and lower public equity return environments, the middle market has historically outperformed.

Outperformance potential in elevated rate environments Outperformance potential in periods of low general market return

Buyout and growth strategies historical outperformance vs. S&P 500 Buyout and growth strategies outperformance vs. S&P 500
Average 5-year excess return by interest rate environment Average 5-year excess return by S&P500 return environment
Buyout & growth strategies Middle market
All strategies Strategies <$2B
FOMC Near-Term & Longer Run Rate
Expectations
+10%
+12% +9%
+9%
+10% +8% +8%
+7%
+8%
+7% +7%
+6%
+5% +5%

+4%
+2% +3%
+2% +2%
+2% +2%

-0.4%
< 1% 1% to 2% 2% to 3% 3% to 4% 4% to 5% > 5% -5% to 0% 0% to 5% 5% to 10% 10% to 15% > 15%

Lower Rates Higher Rates Lower Public Equity Returns Higher Public Equity Returns

Sources: Apogem, Cambridge Associates. Includes North America Buyout and Growth funds, data through December 31, 2023. Sources: Apogem, Cambridge Associates. Includes North America Buyout and Growth funds, data through December 31, 2023.

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Potential portfolio construction benefits of lower middle market exposure
Funds of all sizes can offer diversification and complementary exposure, but the lower middle market has historically outperformed.

• While the lower middle market, middle market, and large & mega funds can offer diversification and complementary exposure, the lower middle market has historically outperformed more frequently
over the long term (table). And, after a decade of relatively low dispersion between fund types, returns have begun to diverge as economic uncertainty and volatility increased, with lower middle and
middle market funds outperforming large & mega peers (chart).

Outperformance potential After a period of low dispersion, economic uncertainty and volatility may be bringing outperformance potential

Pooled buyout and growth performance by fund size

Frequency of LMM
Time Period1,2
Outperformance Period including GFC period3 GFC trough Post-GFC decade: Current
Dot-com bubble3 & initial recovery3 limited dispersion3 Environment4
(10 years) (10 years) (10 years) (10 years) (3.5 years)
1-year 35%
20%

3-year rolling 50% 15%

10%
5-year rolling 58%
5%

0%
10-year rolling 85%
'05 '10 '15 '20 2021 - Q2 2024
Pooled Return

Low Mid Market Core Middle Market Large & Mega S&P 500 Total Return

Sources: Apogem. 1. As of December 31, 2024. Source: Private equity returns as per Cambridge Associates. S&P 500 Total Return Index as per Bloomberg. 2. Outperformance of LMM defined as higher IRR for LMM funds in each period relative to Middle Market and Large & Mega funds. Represents returns
for period referenced as of year-end for each year from 2000 to 2024. 3. Represents 10-year performance as of December 31 for each year. 4. Represents 3-year performance as of December 31, 2024. All figures are shown net of all expenses, management fees and estimated incentive allocations.

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In U.S. private equity: historical valuation, performance, and correlation benefits
We believe the lower middle market provides significant potential benefits in terms of outperformance potential and portfolio diversification.

Potential benefits of the middle market in portfolio construction: the example of private equity

Below-market entry points to date Significant historical outperformance Lower correlation to public markets

Correlation to S&P 500 by size 3,4

Entry multiples by size 1 Returns by fund size 2,4
Large and mega Lower middle market 0.65
17.5%
10.2x

13.0%
7.8x
0.40

5.6x

3.9x

Purchase Multiples Debt Multiples Large and mega Lower middle market Large and mega Lower middle market

Sources: Apogem, as of January 2025. 1. As of June 30, 2024. Includes transactions from January 2011 to June 2024. Source for Large Market LBO Purchase Multiples: LCD US LBO Debt Report ‐ 2Q’24, PitchBook. "Large LBOs" defined as transactions > $500M. Source for Large Market Debt Multiples:
LCD US LBO Debt Report ‐ 2Q’24, PitchBook. “Large LBOs” are defined as issuers with EBITDA > $50M. Source for LMM Purchase Multiples: GF Data’s “GF Data M&A Report August 2024.” Source for LMM Debt Multiples: GF Data’s “GF Data Leverage Report August 2024.” Includes deals between $50M
and $100M. 2. Source: Cambridge Associates pooled average returns since 1986 for North America based buyout and growth funds as of June 30, 2024. 3. As of June 30, 2024. Source: Cambridge Associates. Refers to US buyout funds in vintage years 1997 to 2024. Correlation is calculated using quarterly
returns for public indexes and quarterly IRRs provided by Cambridge Associates. 4. “Lg / Mega” defined as funds > $1B. “LMM” defined as funds < $1B.” All figures are shown net of all expenses, management fees and estimated incentive allocations.

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In U.S. direct lending: historically higher returns and lower volatility
Over the last 20 years, U.S. direct lending has delivered higher returns with lower volatility than public market credit.

Attractive return potential Lower historical volatility

Annualized return by asset class, 2004-2024 Annualized volatility by asset class, 2004-2023

9.4%

10.4%
9.4%

6.5%

6.6%
4.9%
4.1%

3.4%

Cliffwater Direct Lending Leveraged loans Corp bonds (Agg) High yield Cliffwater Direct Lending Leveraged loans Corp bonds (Agg) High yield
Index Index

Sources for both charts: Apogem analysis. Direct lending returns are sourced from Cliffwater Direct Lending Index. Source for public credit returns (leveraged loan, corporate bonds, and high yield bonds) is Bloomberg. Data through December 31, 2024. Past performance is not a guarantee of future results.

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In European direct lending: the lower middle market is increasingly underserved
The European lower middle market corporates appear to need an increasing volume of financing from alternative lenders.

Issuances on the lower end of the leveraged loan market have now been trending … while bank loans have declined steadily over the period, leading European lower-
downwards for a decade… middle market corporates to increasingly seek financing from alternative lenders.
Annual senior loan volume (left axis) and deal count (right axis)
Investor demand for primary loan issuance
140 300

100% 4% 3% 2% 2% 3% 4% 5% 5% 5% 4% 3%
7% 6% 6%
120
250
25%
32%

Number of deals
100 80%
200 44%
44%
€ billions

49%
49%
80 57% 12%
6% 59% 63% 66%
150
60% 70% 71% 76% 78%
60 9%
10% 12%
100 8%
40%
40
8%
61% 60% 9%
8% 8%
50 45% 6%
20 20% 39% 39% 7%
38% 6%
28% 6%
26% 23% 22% 19%
0 0 17% 14% 12%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0%

2006

2007

2008

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2021
Less than €250M €250 to €499M €500 to €999M €1B or More #deals
European Banks Non European Banks Institutional Investors Others

Sources: Kartesia, PitchBook, LCD European Leveraged Lending Review, Q4 2024. Deal count counts first and second lien portions of a single Sources: Kartesia, PitchBook, LCD European Leveraged Lending Review, Q4 2024. Given the lack of primary issuance, LCD did not track enough
transaction as one event. Deal count also excludes any amendments. LCD updates current year volume as necessary to reflect the latest bank observations to compile a meaningful sample for 2009, 2020, 2023, and 2024. As a result, the primary market investor charts are not yet updated for
lending information. those years.

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Investors may consider sponsor-driven and sponsor-less deals, depending on geography
Partnerships are an important consideration when investing in the lower middle market. Our highest convictions are market-dependent.

• With regards to investment partnerships (i.e., sponsor-driven or sponsor-less deals) in the lower middle market, investors must assess which approach is best suited for the geography and segment
they are considering for their portfolio. Choosing the right opportunity for the market, and the right partners for that opportunity can contribute positively to investor results.
• In Europe, for example, sponsor-less deals make up the large majority – nearly 90% – of the universe of lending opportunities available. In other words, by focusing on the sponsor-less market,
investors expand their investment universe by nine times. In our view, this allows our investment teams to avoid compromising on the quality of management teams, information provided, collateral
secured, and other essential investment inputs.
• In the U.S., on the other hand, a more mature and highly competitive market means that sponsor partnerships can offer distinct competitive advantages under the right circumstances, particularly when
leveraged over a long investment track record with strong investor relationships.

Potential positives of sponsor-driven and sponsor-less deals, assuming an Keys to success in non-sponsored deals
experienced partner is selected:
Indicator Sponsor-driven Sponsor-less

Sponsors care about their reputation with Sponsor-less deals often require heavier
Local presence allows investors to be recognized as a local, trusted credit and capital
preferred lenders, encouraging more financial covenants and more attention to partner.
Discipline discipline in the sourcing and due diligence collateral, including cash flow and hard assets
process. on hand.

Risk Sponsor partners often provide third-party

Leverage levels are often lower
management due diligence.
Strong due diligence capabilities combined with the provision of comprehensive, flexible
Patient, committed capital gives private equity
Sponsor-less transactions often have an extra long-term debt and capital solutions
layer of interest alignment, as company
sponsors the ability to assist businesses
Recovery through incremental capital investments to
management often take further steps to
preserve their credibility or family history. For
support growth or in times of distress.
them, the deal is about more than the loan.

Partnership, growth-oriented approach allows non-sponsored borrowers to partner with a

Negotiating with sponsor-less companies
Sponsors have their own lens into the breadth
provides a structural advantage, potentially capital provider that can financially support companies to make significant investments
Transparency and depth of portfolio companies and can be
called upon for insights and deal flow.
allowing for better terms or bespoke whether to grow organically or through acquisitions.
opportunities.

Opinions of Apogem Capital and Kartesia. 2025.

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A trusted partner for investing in global private markets
As a long-standing and trusted partner to our parent company, New York Life Investments offers institutional investors several advantages:

Experienced Strategic Market Alignment

Teams Platform Access with Investors

Experience across Built with purpose Superior access Highly selective

multiple cycles Consistency of capital through its Meaningful allocations Thoughtful diversification
Deep institutional knowledge investment business arm Opportunistic Long-term focus
Market expertise Proven and repeatable process Robust industry network Co-investment
with clients

New York Life Investments and its investment teams understand the unique needs
of insurers and other institutional investors because our parent company,
who has been providing financial security to its policyholders for over 175 years, has those same needs.

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About the authors
Demonstrating the depth and breadth of the New York Life Investments platform

Objective, top-down analysis

Global Market Strategy at New York Life Investments
Our team of market strategists connects macroeconomics to asset
allocation. Leveraging proprietary research alongside the breadth and
depth of the New York Life Investments platform, we provide actionable
insight into market-driving events, structural themes, and portfolio Lauren Goodwin, CFA Julia Hermann, CFA Michael LoGalbo, CFA
construction to empower investment decision-making. Chief Market Strategist Global Market Strategist Global Market Strategist

Private markets capabilities:

Seasoned bottoms-up expertise
The benefit of our multi-boutique platform
At New York Life Investments, we offer a wide range of private market
solutions tailored to meet client objectives. Our investment strategy is rooted
in extensive experience and deep institutional knowledge, emphasizing
thoughtful diversification and long-term growth. With a proven, repeatable
process, our skilled team expertly manages assets across key sectors such
as private equity, private credit, real estate, and infrastructure, leveraging
deep industry insights and a methodical approach.
Additional definitions
Most definitions are provided no the relevant page. For those pages where space does not allow, as marked on those pages, additional definitions are provided here.

The Broadly syndicated loan market (BSL) is a segment of the loan market where large loans, typically for leveraged buyouts or corporate financing, are syndicated among a wide group of institutional investors, such as banks, mutual funds, and
CLOs (Collateralized Loan Obligations).
The Bloomberg U.S. Aggregate Index is a broad-based flagship benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market. The Index includes Treasuries, government-related and corporate
securities, mortgage-backed securities (agency fixed-rate pass-throughs), asset-backed securities and commercial mortgage-backed securities (agency and non-agency).
The Bloomberg U.S. Corporate High Yield Index measures the high yield, U.S. dollar-denominated, fixed-rate corporate bond market. Securities are classified as high yield if the middle rating of Moody’s, Fitch and S&P Ba1/BB+/BB+ or below.
The Cambridge Associates Buyout & Growth Benchmark represents a collection of institutional quality private fund performance and are based on data compiled from institutional-quality global buyout and growth equity funds formed since
1986. The benchmark aggregates portfolio-level performance information. Fund and investment-level performance information is drawn from the quarterly and audited annual financial statements of the fund managers and each manager’s reported
performance numbers are independently recreated from the financial statements and verified by Cambridge Associates.
Dry powder refers to the amount of cash reserves that private equity firms or investment funds have available to deploy for new investments. It’s essentially uninvested capital waiting to be allocated.
The EDHUSA Index measures the performance of the U.S. private equity market, providing insights into the returns generated by private equity investments in the United States.
The FTSE NAREIT Index tracks the performance of real estate investment trusts (REITs), which are companies that own, operate, or finance income-generating real estate across various sectors.
GPR 250 Unlevered Listed CRE Index is an index measuring the performance of the largest 250 publicly listed real estate companies globally, unlevered to provide insight into property-level performance without debt impact.
Green Street CPPI tracks changes in the pricing of U.S. commercial property markets, based on unlevered (debt-free) asset values and transactions.
INREV Non-Listed CRE index is a real estate index maintained by INREV (European Association for Investors in Non-Listed Real Estate Vehicles) that measures the performance of non-listed (private) commercial real estate funds across Europe.
The LPX50TR Index tracks the performance of private equity funds globally, providing a benchmark for investors to evaluate the performance of their private equity investments.
The LPXDITU Index tracks the performance of private debt funds globally, offering a benchmark for investors to assess the performance of their private debt investments.
Preqin Benchmarks: Represent the PreqIn Private Capital Quarterly Index, which captures in an index the return earned by investors on average in their private capital portfolios, based on the actual amount of money invested in private capital
partnerships. Data sourced from variety of sources, including data from institutional investors obtained through Freedom of Information Act (FOIA) requests and submissions of data by managers.
The Russell 2000 is a stock market index that tracks the performance of approximately 2,000 small-cap U.S. companies, representing a segment of the broader equity market.
The Russell 1000 Growth Total Return Index tracks the performance of the 1000 largest U.S.-listed growth companies.
The Russell 1000 Value Total Return Index tracks the performance of the 1000 largest U.S.-listed value companies.

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Additional definitions (continued)
Most definitions are provided no the relevant page. For those pages where space does not allow, as marked on those pages, additional definitions are provided here.

The S&P 500 Index is a stock market index that measures the performance of a select group of large-cap companies listed on U.S. stock exchanges.
The S&P 500 Growth Equity Index tracks the performance of the growth segment of the S&P 500, comprising of companies with higher price-to-book ratios and higher expected growth.
The S&P 500 Value Equity Index tracks the performance of the value segment of the S&P 500, comprising of companies with lower price-to-book ratios and lower expected growth.
S&P 500 listed private equity index is a sub-index of the S&P 500 tracking companies within the index involved in private equity or alternative investment management.
S&P 500 energy index is a sector index within the S&P 500 that tracks companies in the energy industry, including oil, gas, and renewable energy sectors.
S&P 500 materials index is a sector index within the S&P 500 focused on companies that produce raw materials like chemicals, metals, and construction materials.
S&P 500 information technology index is a sector index within the S&P 500 representing technology companies, including hardware, software, semiconductors, and IT services firms.
The term premium is the additional yield that investors require to hold a long-term bond instead of a series of short-term bonds over the same period. It reflects compensation for risks such as interest rate fluctuations and inflation over time.
US Investment Grade refers to investment-grade bonds issued by companies in the United States with strong credit ratings, indicating lower risk of default.
US High Yield refers to high-yield bonds denominated in U.S. dollars, typically issued by companies with lower credit ratings, offering higher yields to compensate for higher risk.

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Important information

For distribution in select European Union countries:

This document only describes high-level capabilities of the boutiques. None of the boutiques will accept subscriptions in any funds not admitted to marketing in your country or provide services to potential customers in your
country, including discretionary asset management services, except where it is licensed to do so or can rely on an applicable exemption.
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This material represents an assessment of the market environment as of a specific date and is subject to change; and is not intended to be a forecast of future events or a guarantee of future results. Information contained
herein has been obtained from sources believed to be reliable, but no guarantee is given as to its reliability. Although New York Life Investments selects carefully the data and sources within this document, errors or
omissions cannot be excluded a priori. This information should not be relied upon by the reader as research or investment advice regarding any investment product or any issuer or security in particular.
The strategies discussed are strictly for illustrative and educational purposes and are not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. This information should not
be relied upon by the reader as research or investment advice regarding any strategy and there is no guarantee that any strategies discussed will be effective.
This material contains general information only and does not take into account an individual's financial circumstances. This information should not be relied upon as a primary basis for an investment decision. Rather, an
assessment should be made as to whether the information is appropriate in individual circumstances and consideration should be given to talking to a financial advisor before making an investment decision.Past
performance is no guarantee of future results, which will vary. All investments are subject to market risk and will fluctuate in value. Diversification cannot assure a profit or protect against loss in a declining market.
The opinions expressed are those of the Global Market Strategy team, an investment team within New York Life Investment Management LLC and not necessarily those of other investment boutiques affiliated with New
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Important information

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The content of this document shall not be construed as marketing or soliciting investment of any products or services and is being made available to you for general educational/economic purposes only.
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Important information

“New York Life Investments’’ is both a service mark, and the common trade name, of certain investment advisors affiliated with New York Life Insurance Company. New York Life Investments is comprised of certain
affiliated asset management businesses (also referred to herein individually as a “boutique” and collectively as “boutiques”) of its parent company, New York Life Insurance Company. These boutiques include: Ausbil
Investment Management Limited (“Ausbil”), Apogem Capital LLC (“Apogem”), Candriam S.C.A. (“Candriam”), IndexIQ Advisors LLC (“IndexIQ”), MacKay Shields LLC (“MacKay Shields”), New York Life Investment
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Past performance is not indicative of future results. Information included herein should not be considered predicative of future transactions or commitments made by New York Life Investments and its affiliated boutiques
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Alternative investments, hedge funds, and private placements involve significant risks, including illiquidity due to transfer restrictions and a lack of secondary markets. These investments can be highly leveraged,
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The material contained herein is for informational purposes only. No offer of investment advice or solicitation to buy or sell the securities or to participate in any trading strategy is being made by means of this material,
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No representation is being made that any account, product, or strategy will or is likely to achieve profits. This material has been prepared for informational purposes only, and is not intended to provide, and should not be
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