No, we don’t think so. While President Donald Trump made numerous campaign pledges that could be seen as beneficial, US large-cap stocks will need more than policy shifts to outperform US small-cap stocks in 2025.
Specialty finance investing can effectively complement a broad private credit allocation. It enhances portfolio diversification while preserving capital and offers to create stability through a variety of underlying asset types and potential return targets.
A first look at our annual survey provides analysis of responses from 159 colleges and universities on investment pool returns and asset allocations, highlighting variations in performance and asset management strategies.
The Endowment Oversight Flash Statistics Report offers an initial glimpse into survey findings from 143 endowment and foundation participants.
The Cambridge Associates 2025 Outlook features our investment outlook for 2025, separated into eight key investment themes.
We expect global equities to outperform bonds, as near trend economic growth should support continued corporate earnings growth and healthy risk appetite. Stock/bond correlations should be lower than the 2023–24 peak levels, even as protectionist US policy may drive global economic uncertainty higher.
We expect most major central banks to continue cutting policy rates, which should allow bonds to outperform cash. With breakeven inflation rates likely to be range bound, returns of inflation-linked and nominal bonds should be similar.
We expect developed markets value and small-cap equities to outperform, given our economic views and their steep valuation discounts. Regionally, we believe US equity performance will not match the level set in 2024, allowing European, Japanese, and emerging markets equities to perform more in line with broader developed markets. Within emerging markets, strong Indian equity gains should moderate, while we doubt Chinese equities will collapse. At the same time, we expect long/short equity strategies will perform better than typical.
We expect private investment performance to improve, as the impact from overinvestment in 2021–22 recedes. The asset class’s long-term performance should continue to attract individual investors and managers are creating pathways for them to more easily access opportunities. While M&A and IPO exit opportunities may improve, we believe the importance of continuation vehicles as an exit path will grow. In Asia, we expect Japanese buyout and Chinese venture capital transaction activity to increase.
We expect California Carbon Allowances (CCAs) to recover from 2024 losses as clarity on supply reductions emerges. Meanwhile, impact private investment flows will favor strategies with faster distributions and commercial validation. Additionally, headwinds for private diverse manager allocations should ease, but the overhang of emerging funds may lead to consolidation or shutdowns, challenging managers.