2 minutes to read by  PH&N Institutional team Feb 25, 2025

PH&N Institutional has long been committed to the investment success of our clients. We combine a relentless pursuit of strong investment performance across a broad range of asset classes with thoughtful investment ideas and advice to help clients build resilient portfolios that are aligned with their long-term goals.

This report focuses specifically on a range of private market asset classes that have become foundational elements in many institutional portfolios – real estate, infrastructure, and private credit (in the form of commercial mortgages). In the following pages, we describe the philosophy underpinning our approach to investing in these asset classes, review market conditions, and discuss some of the themes that we expect will be relevant for the year ahead.

For decades, public market equity and fixed income assets dominated most investment portfolios, but for reasons described below, core private market investments now represent a meaningful component of the policy asset mix of many institutional investors. Among other things, core private market investments offer the following features:

•  An attractive mix of current income and long-term growth potential.

• The diversification benefits of direct exposure to assets in sectors of the domestic and global economy where public market investment opportunities are not necessarily available – this is particularly important today as public equity markets have become increasingly concentrated by geography and in a relatively small handful of individual companies.

• Incremental returns stemming from the illiquid nature of these investments relative to public market assets – an appealing feature for investors that have capacity for managing some illiquidity risk in a portion of their portfolio.

• Enhanced return stability resulting from the fact that many of the underlying assets are valued less frequently, and not subject to the vagaries of short-term market sentiment.

Please read the full piece here.

Disclosure

This document has been provided by PH&N Institutional for information purposes only and may not be reproduced, distributed or published without the written consent of PH&N Institutional. It is not intended to provide professional advice and should not be relied upon in that regard.

PH&N Institutional takes reasonable steps to provide up-to-date, accurate and reliable information, and believes the information to be so when printed. The views and opinions expressed herein are those of PH&N Institutional and are subject to change without notice. This information is not intended to be an offer or solicitation to buy or sell securities or to participate in or subscribe for any service.

Information obtained from third parties is believed to be reliable, but no representation or warranty, express or implied, is made by PH&N Institutional, its affiliates or any other person as to its accuracy, completeness or correctness. We assume no responsibility for any errors or omissions in such information.

Investments in alternative strategies are speculative and involve significant risk of loss of all or a substantial amount of your investment. Alternative strategies: (i) may engage in leverage and other speculative investment practices that may increase the risk of investment loss; and (ii) can be highly illiquid. In assessing the suitability of these investments, investors should carefully consider their personal circumstances including time horizon, liquidity needs, portfolio size, income, investment knowledge and attitude toward price fluctuations. Investors should consult their professional advisors and consultants regarding any tax, accounting, legal or financial considerations before making a decision as to whether the strategies mentioned in this material are a suitable investment for them.

ESG factors are considered by our investment teams to varying degrees and weights, depending on the investment team’s assessment of that ESG factor’s potential impact on the risk-adjusted, long-term performance of the security and/or the fund. ESG factors are generally not likely to drive investment decisions on their own, and in some cases, may not impact an investment decision at all. RBC GAM has a general approach to active stewardship, proxy voting, and engagement that address ESG matters among other matters.

This document may contain forward-looking statements about general economic factors which are not guarantees of future performance. Forward-looking statements involve inherent risk and uncertainties, so it is possible that predictions, forecasts, projections and other forward-looking statements will not be achieved. We caution you not to place undue reliance on these statements as a number of important factors could cause actual events or results to differ materially from those expressed or implied in any forward-looking statement. All opinions in forward-looking statements are subject to change without notice and are provided in good faith but without legal responsibility.

RBC Global Asset Management is the asset management division of Royal Bank of Canada (RBC) and includes RBC Global Asset Management Inc. (RBC GAM Inc.), RBC Global Asset Management (U.S.) Inc., RBC Global Asset Management (UK) Limited, RBC Global Asset Management (Asia) Limited, and RBC Indigo Asset Management Inc., which are separate, but affiliated subsidiaries of RBC. PH&N Institutional is the institutional business division of RBC GAM Inc. Phillips, Hager & North Investment Management is a division of RBC GAM Inc. RBC GAM Inc. is the manager and principal portfolio manager of the Phillips, Hager & North (PH&N) and RBC investment funds.

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© RBC Global Asset Management Inc., 2025.

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