Private asset ETFs under pressure

The blizzard that has involved the world of private credit (or private debt) since the beginning of the year has also infected the world of private equity. A domino effect that has compressed the quotations of this highly articulated world, but according to experts, if there is no recession soon in the wake of the energy crisis, the private equity business remains interesting and the discounting of many companies may represent an opportunity. Everything falls into the world of so-called unlisted assets, i.e. alternatives to the stock markets. The former is a financing channel (debt) alternative to the banking system, while traditional private equity moves on the side of the purchase of participations (equity) often aimed at a landing on the stock exchange. These two businesses are often interconnected and many operators are active in both areas.

Five ETFs linked to this segment are listed on the main European stock exchanges today. Three have a history of several years while two (Saba and Goldman) were activated in 2026. Since the beginning of the year, the three main ETFs (two Ishares and one Xtrackers) have lost between 14% and 18%, while maintaining a positive three-year balance, albeit below the performance of the S&P 500. This year's declines are due to the private credit crisis that has infected the entire sector, especially affecting companies that are linked to this business (see other article on page). Within the ETFs, there are the main international players: from the Canadian Brookfield (which has left around 9% on the ground since the beginning of the year, doing better than many competitors) to the British 3i Group, passing through the groups that have suffered the greatest downturns (such as Blackstone, Apollo Global and Kkr) to the Swedish Eqt Ab (-17% since the beginning of the year) with funds specialised in private equity, infrastructure and real estate.

 Perspectives

"Private equity stocks," explains Alberto Conca, head of investments at Ifg+Zest, "can be attractive after the recent reversal as long as the system does not go into recession and rates do not skyrocket. Today's tensions are on the private debt front, and private equity players who also have funds in private debt are suffering the most. Private debt, however, is not a systemic danger as it has marginal weight and is worth less than 3% of US banks' balance sheets. Private debt funds, however, use their own investments to give as collateral to banks to take out loans and this channel is certainly bigger and needs to be monitored carefully".

Private debt today has two areas of greatest uncertainty, the commercial real estate sector and, recently, the software world due to the risks associated with the spread of artificial intelligence. "That said," Conca concludes, "private equity companies continue to carry out their activities and historically this segment, although illiquid, has average annual returns of around 15% on a five-year basis, which is much higher than private debt and even the S&P 500. The big risks can only come if the current crisis pushes rates very high".