McKinsey Global Private Markets Review: the macro lens

The McKinsey Global Private Markets Review is the broader-scoped companion to the Bain Global Private Equity Report. Where Bain focuses on PE specifically and goes deep on operating themes, McKinsey covers the entire private capital landscape: PE, private credit, real estate, infrastructure, and natural resources. If you operate in PE, you should read both. The McKinsey report contextualizes PE within the broader allocation decisions LPs are making.

The recurring themes from recent editions:

Private credit is the structural growth story. Direct lending and other forms of private credit have grown faster than PE for several consecutive years. The retreat of regional banks from middle-market lending, combined with insurance and family-office demand for yield, has expanded private credit AUM dramatically. For PE operators, this matters because debt financing for deals increasingly comes from non-bank sources, with different terms, covenants, and decision speeds.

Infrastructure has become a real allocation. Infrastructure private capital has grown into a major category, driven partly by energy transition investment and partly by LP demand for inflation-linked yield. The lines between infrastructure and PE blur on certain deal types (industrials, utilities, communications towers) that sit in both books.

Distributions remain compressed across categories. The distribution challenge is not unique to PE. Real estate, infrastructure, and natural resources are all distributing slower than LPs underwrote. The combined effect across an LP's portfolio is constraining new fundraising commitments to all categories.

Vintage performance dispersion has widened. Top-quartile and bottom-quartile fund performance within any given vintage has grown more disparate. Manager selection matters more than vintage selection. LPs are concentrating commitments with established managers and being more selective with first-time funds.

Operational value creation as a unifying theme. Across PE, infrastructure, and even some private credit, the operating thesis is becoming the differentiator. Funds that can demonstrate operating capability are attracting capital. Funds that rely on financial engineering are not.

The role of secondaries has grown. GP-led secondaries, continuation vehicles, and LP-side liquidity solutions have become a real category. For LPs, secondaries provide liquidity in a slow distribution environment. For GPs, continuation vehicles offer a way to hold the best assets longer when a traditional sale is not optimal.

The strategic implication for operators and sponsors: the capital environment for private investment is shifting in ways that affect deal financing, operating expectations, and exit pathways. The McKinsey report is the best single source for the macro view. Read it alongside Bain to triangulate.