Private Markets 360° | Episode 40: Resilient Growth, Shifting Capital: Macro Signals for Private Markets in 2026

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Christina McNamara [00:00:00]:

Welcome to Private Markets 360, your insider's guide to the world of private investments. Today we are tackling one of the most important questions facing private market investors. How do you navigate a macro environment that has defied expectations? Growth has remained resilient. Markets have performed strongly. The US economy continues to outpace much of the developed world. And yet uncertainty has not gone away. Rates, fiscal dynamics, currency shifts, and geopolitical risks are still very much at play. And in private markets, the macro backdrop isn't just a headline.

 

Christina McNamara [00:00:41]:

It shapes deal flow, capital structures, M&A activity, portfolio company performance, and ultimately returns. From lower rates potentially supporting deal activity to the rise of hybrid capital structures, to divergence between US and Europe, the macro lens is becoming increasingly central to private capital allocation. To help us unpack all of that, we are joined today by Nicholas Brooks, Head of Economic and Investment Research at ICG. Nicholas is responsible for formulating the firm's top-down macro and market views and works closely with investment teams across sectors and geographies. Before joining ICG in 2016, he held senior roles at ETF Securities, Henderson Global Investors, and Deutsche Bank. Nick, welcome to Private Markets 360. It's a pleasure to have you with us today. How are you?

 

Nicholas Brooks [00:01:40]:

I'm great, and thank you very much for having me on.

 

Christina McNamara [00:01:44]:

Of course. Let's jump in. Start with your professional career journey. You're originally from the United States, but you've built most of your career in London. Could you share how that path developed?

 

Nicholas Brooks [00:01:59]:

To go back to the very beginning, I spent a lot of my younger years growing up overseas, going to international schools because of my father's work. So I spent a lot of time abroad. We were in North Africa for a bit. We were in Asia for a lot of that, and that stimulated my interest in broader macro and geopolitical issues as well as cross-cultural issues and a general interest in the world. Then I went back to the US for undergraduate and graduate school. I finished graduate school in New York at Columbia. And when I first got out, I got a role at Citigroup in New York City. And I enjoyed it tremendously.

 

Nicholas Brooks [00:02:48]:

I then moved to Hong Kong where I first worked with a company called James Capel, a global securities broker (later bought by HSBC), covering China, Hong Kong economics initially.

 

Nicholas Brooks [00:03:37]:

And then that broadened out to Southeast Asia, as well. And as my career progressed, I moved to Deutsche Bank as part of their global markets macro team covering Asia macro and strategy. It was a fascinating time, and we had a lot of access at that time. Where I could go down to Bank Indonesia and meet with the deputy head of research or the head of research or go to Bank Negara Malaysia or go up to Beijing or go into China and travel and, meet with, CEOs of companies and meet with key policymakers. So it was an exciting and very interesting time. Fast forwarding, I ended up moving to London to do my PhD focusing on the dynamics of financial crisis, or actually I think the title was something like the Debt Dynamics of Financial Crisis.

 

Nicholas Brooks [00:04:32]:

Very appropriate given where we are today in the world. And I've been in London ever since. I joined ICG about 10 years ago, having been in public markets most of my career. It's been a very steep learning curve and it's been a fantastic place to work.

 

Chris Sparenberg [00:04:51]:

Certainly the right background for someone who's the Head of Economic and Investment Research at ICG. You've described your role as sitting at the intersection of macro and private markets. Could you tell us what that looks like day to day in, in your job. 

 

Nicholas Brooks [00:05:07]:

As you know, in our industry, we tend to be very bottom-up, very deal-focused, very focused on company fundamentals and understanding quality of management. And those really are, I'd say, the key drivers of how our investment process is run. I provide an overlay and a structure. So one of my key roles is to provide a house view on the macro outlook. I've been doing this long enough, and I think most of the people in our industry are sophisticated enough, to know that giving a 1 or 2-year forecast is probably not going to be massively accurate, or if it is, it's probably luck. So I look at it more as trying to understand structural risks that could affect our industry as a whole and individual businesses we invest in. I look at the big picture - what are the risks of a financial crisis? What are the risks of a deep recession? What are some of the structural factors that might be affecting bilateral currency rates? What are some of the structural factors that might be affecting the interest rate outlook at the long end and the short end? I think these areas, again, one can get these wrong as well, are areas where I think one can discuss the issues with more confidence and be able to put a context around investing. One of my other roles is to work more on a sectoral level, understanding thematics that are driving parts of the market as well as broad country-level analysis.

 

 

That all comes together. So I will work with our senior management team as needed on a variety of issues. I will meet with and work with our investment teams more on an ad hoc than in a systemic way. And, and then also, of course, I work very closely with our key LPs and help them understand what is going on in our markets and what is going on with our investment theses. I also run a database which we call the ICG Private Company Database, where we track the fundamentals of close to 500 companies in Europe and the US, and we track Asia as well, though we don't publish that just because the sample size is a bit small, smaller than what we have in Europe and the US. But that allows us to track what's going on with company EBITDA at a sector, subsector level, look at key debt characteristics, look at margin and revenue trends. And that gives us insights into what really is going on at the micro bottom-up level and allows us to draw conclusions more broadly.

 

Nicholas Brooks [00:07:58]:

And again, with our LPs we will provide this analysis as well.

 

Christina McNamara [00:08:08]:

Now that data set is probably one of the most expansive in private markets today. It gives you certainly a uniquely granular vantage point. How does that bottom-up perspective inform your broader top-down views?

 

Nicholas Brooks [00:08:25]:

That's a great question. Actually, quite a bit. I've always found, one of the issues with macro is you're dealing with very high-level numbers. You're looking at GDP, you're looking at a CPI number or in the US, a PCE number. And of course you can cut that into smaller segments. You can look at what's going on with private consumption and what's going on with different aspects of investment, but it's all very high level. And frankly, I think that's why economists have a reputation for not necessarily forecasting well, because you're dealing with some really high-level numbers. One of the advantages of having this database is you get a feel quite quickly for what's going on at the corporate level, which is really what drives the economy.

 

Nicholas Brooks [00:09:12]:

So whether it's driving employment and therefore private consumption, or whether it's driving investment, exports and imports, this is all coming obviously from the micro level. So I get a lot of insights - one, looking at the data, but also being able to talk to our investment teams across all of our strategies from the more liquid to the less liquid strategies. It gives a lot of insight into key issues like are they passing on the cost increases? Are there price increases? Are there wage increases coming through? You'll see that at the micro level before you'll see it in the CPI numbers or in US payrolls numbers. And then are they passing it on or not? That gives you an insight into one, whether we're going to see CPI inflation rise swiftly, or if we're going to see a downturn in company investment if their margins are getting squeezed. So, you learn a lot from micro data, and I think you get ahead of a lot of the macro data by having access to the company-level information.

 

Chris Sparenberg [00:10:18]:

That's great. Why don't we shift gears a little bit and look back at 2025? I think it's fair to say that the year surprised a lot of people. Growth remained resilient, markets performed strongly. What are your views on what has held the economy up so well?

 

Nicholas Brooks [00:10:36]:

I tend to look at things from a medium-term structural point of view, partially because I think it's easier to get that right than the short-term twists and turns of markets and economies. But also, critically, it's far more important from the point of view of the way we invest. Our industry tends to invest on a medium to long-term basis. So it's really the structural factors that matter most. And to me, actually one of the best ways to look at risks and understanding where we are is to look at balance sheets. The obvious ones are corporate balance sheets. But you need to also look at household balance sheets, look at the balance sheets of systemically important banks.

 

Nicholas Brooks [00:11:25]:

And I think probably becoming increasingly important now is understanding the balance sheets of governments. So my view would be that as long as you can look at the balance sheets of systemically important financial institutions, Are they well ring-fenced? Do they have, adequate liquidity? Are they being supervised properly? I would argue yes, they are. That was not the situation in the run-up to the 2008-9 crisis. But one thing regulators learned from that crisis was you need to have a sound banking system that's well regulated. And that has been the case. We're seeing some potential loosening in the US. In Europe, we have not. Currently banks' balance sheets are in pretty good shape. Then if I look at household balance sheets, it may surprise some, but if you look at aggregated data from the BIS or the IMF or from national government sources, you'll see that actually households have generally de-levered since 2008-9 in the US, across Europe, and the UK.

 

Nicholas Brooks [00:12:40]:

And although we've heard a lot about the K-shaped economy, which I think is correct. So a lot of the balance sheet improvement is at the higher income levels, and there's certainly some stress at lower income levels, especially in the US. Broadly, at an economy-wide level, at an aggregate level, household and corporate balance sheets are pretty sound on the data that we have for private markets. Public markets data will show similar trend. Actually, corporate balance sheets are pretty strong as well. So again, that doesn't mean that we're not going to have problems in certain segments of the corporate sector, just like we're having some pressure in certain segments of the household sector. But at a systemic level, corporate balance sheets look pretty strong. So we've got pretty strong household, corporate, and bank balance sheets.

 

Nicholas Brooks [00:13:38]:

Where I think the real risk is now is government balance sheets. And frankly, my biggest concern right now is in the US where there so far has been very limited attempt to rein in fiscal deficits that, according to IMF data, you're looking at fiscal deficits in the US anywhere from 7% to 8% of GDP. And Europe is also struggling with — certain countries struggling with high government debt and the UK to some degree as well. And I think how this is managed is going to be quite important to how economies perform looking out over the next 5 years.

 

Christina McNamara [00:14:26]:

Now, switching gears from an M&A perspective, there's been a lot of noise, higher rates, valuation resets. Geopolitical uncertainty. So the narrative coming into 2025 was cautious at best, but you've referenced that 2025 wasn't that bad. What did you observe on the ground that led you to that conclusion?

 

Nicholas Brooks [00:14:53]:

So if we start first at the GDP, broad economic growth level, most economies performed pretty well. I know at the beginning of the year, particularly when the Trump administration started to put in place - or discuss putting in place - tariffs, there was a lot of concern about the potential for a global recession, for certain sectors to be hit particularly badly. But with hindsight, we look back now, we think the US economy grew probably just above 2%. Europe's been growing somewhere around 1.5% to 1.6%. The UK, a little slower than that, but still growing somewhere between 1% to 1.5%. By historic standards, that's pretty good growth, which, from an earnings point of view, should be positive for company performance. Again, of course, certain sectors will do better than others depending on what's driving that growth. So in the US, a lot of it has been tech related.

 

Nicholas Brooks [00:15:56]:

One has to take those nuances into consideration. But broadly, growth has been good and broadly public company earnings and private company EBITDA growth has been pretty solid. Now, interest rates obviously went up a lot a couple of years ago due to the big surge in inflation, but they generally, at least the short end, have been trending down over the course of the past year. I mean, in Europe actually we've seen rates halve to 2%. The US is taking a little longer to get down, and I suspect it's going to be a bit of a bumpy road getting those rates down, but ultimately we're moving in the right direction. So lower interest rates and stable economic growth actually provide a pretty good operating environment for corporates. Again, where the really interesting part comes in, which is what our deal teams and other companies' deal teams are focused on, is where can we get that growth, and what sectors and what areas might we want to avoid. But broadly, there is growth and shorter maturity interest rates have come down, and that provides, I think, a generally pretty good environment.

 

Chris Sparenberg [00:17:15]:

I think it was easy to observe that in public markets last year. And it seems like on a really granular level, you could observe that in private companies, but as a whole, private markets look quite a bit different than public markets last year. Could you explain what you view as the divergence there?

 

Nicholas Brooks [00:17:34]:

Public markets by their nature tend to swing a lot more than you tend to see in private markets. So when the times are good, interest rates are coming down, growth is strong, you'll see generally pretty fast positive moves in public markets such as equity markets, but also in the credit space, etc. So when things look a little wobbly, people get worried or growth starts slowing more sharply than people expected, you get those much stronger swings downwards. On the private side, for structural reasons, we don't see those kinds of swings. Broadly the mindset tends to be to look at the S&P 500 as the key proxy for risk assets and how markets are performing. As everyone knows, a big part of the performance up until recently of the S&P 500 has been 7 critical stocks. Admittedly, the equal-weighted S&P has come up a lot now too, but a lot of the growth and a lot of the performance in public markets has been focused in a few key areas, whereas private markets, I would argue, are more diversified and broadly have less exposure to some of those areas where we saw the highest revaluations across public markets. So to some degree, it has to do with different types of exposures in benchmark public indices versus what we in the private markets tend to invest in.

 

Christina McNamara [00:19:30]:

Let's zoom out for a moment to the bigger picture. Private markets don't operate within a vacuum. They're heavily influenced by a number of conditions within the market. What matters most right now, and where should investors really be focusing their attention?

 

Nicholas Brooks [00:19:52]:

The way I look at it is, as long as the underlying fundamentals of the companies that one is exposed to are solid, investments will work out. Now, determining what the ultimate return is will depend on factors that are at times harder to control - whether it's interest rates or whether it's broader market valuations. But if you have a company that's growing its EBITDA at a good pace, it's managing its balance sheet well, ultimately you're generally going to end up with a good return and a positive investment. So to me, it's about what's the broader growth environment like? Are economies going to remain solid? What sectors within economies are likely to grow faster than others on a sustained basis? And are the companies that you're invested in or thinking about investing in, are they going to be able to grow their EBITDA in that type of environment? To me, my bias being top-down, is these fundamentals are key to good investing. Things like valuations and things like interest rates - these are harder to predict. But I think if you find a company with good management and good EBITDA prospects in sectors that are growing, ultimately you will usually do well.

 

Chris Sparenberg [00:21:47]:

And on the private company side, as we observe portfolio companies becoming more proactive about their capital structure, their strategies, Are you seeing some of those private companies start to take a proactive approach to using hybrid or structured solutions to fuel that growth?

 

Nicholas Brooks [00:22:05]:

That’s not my normal territory, to be honest, but I would certainly say that at ICG, we have always had an expertise in working across balance sheets, and hybrid solutions come naturally to us. And certainly, for companies, as their sophistication grows, understanding how different methods of financing can be beneficial and provide flexibility, I think is certainly there. As our industry has become more sophisticated these types of solutions are becoming, I wouldn't say more of the norm, but let's just say I think that these types of structures are becoming probably better recognized as good methods of financing, both for the corporate and also for the investor.

 

Christina McNamara [00:23:15]:

Over the past few years, interest rates have seen the single biggest variable shaping private market activity. If rates continue to edge lower, what does that mean for private markets activity going forward?

 

Nicholas Brooks [00:23:33]:

I think certainly lower interest rates are a positive for our industry, as well as financial markets more broadly. So I think certainly it will help stimulate activity and perhaps stimulate more M&A and provide more of a tailwind to the industry broadly. Again, I don't think it's absolutely necessary to keep  businesses moving along well. It's just that lower rates certainly provide a tailwind.

 

Chris Sparenberg [00:24:11]:

Let's talk geography for a moment. Especially looking back, we've seen the US economy growing faster than much of Europe. What's your view on the divergence there?

 

Nicholas Brooks [00:24:23]:

I'd say that a lot of US growth has been focused in a few key sectors, with tech being the main one. If we look at US final demand growth to get rid of the distortions that can be caused by net exports, we look at final demand growth, meaning investment in private investment or private consumption. A big chunk of US growth has been driven by investments in AI and related industries. So outside of that area, the growth rate differential between Europe and US is actually much smaller than I think most investors perceive. I would also say that as we move into 2026 and beyond, I think that Europe has one advantage in that I think it has more scope and will move forward with more substantial spending on the fiscal, on the defense and infrastructure side. Obviously it's been talked about a lot, but Europe, Germany in particular is very serious about increasing and has already started increasing its defense and infrastructure spending. And while France and Italy are a little more constrained because they have relatively high debt-to-GDP levels, most of the rest of Europe have quite a bit of scope to invest and spend more on infrastructure and defense. On top of that, I think because of the change in the geopolitical atmosphere over the past year, I think it's also very clear that Europe feels quite strongly, or leaders of Europe feel quite strongly, that they need to become a little more resilient and perhaps a little more independent from the US than in the past.

 

Nicholas Brooks [00:26:40]:

I think we are seeing a real mindset change in Europe that, frankly, is a good thing. That I think should help move the reform agenda more quickly over the coming years. So it's not going to happen overnight, but things like having properly working Europe-wide capital markets, working more closely on increasing the competitiveness of region-wide industries. There are a lot of efficiencies that I think can be pushed in the coming years. And again, if you step back, looking at Europe, the savings rate in Europe, the household savings rate tends to be quite high, and a large portion of household savings are in bank deposits and in very low-yielding debt-like structures, unlike the US, for example, where savings rates are much lower but a lot more of the savings is in equities and in more risk-oriented asset classes. So I think to the degree that Europe can start to channel more of these savings into productive investments, that also is an area that could help Europe increase its productivity and growth levels. It's all out there. We'll have to see how this progresses.

 

Nicholas Brooks [00:28:17]:

As I said earlier, it's not going to happen quickly, but I do think that there's a lot of potential in Europe to boost productivity and growth in the coming years.

 

Chris Sparenberg [00:28:26]:

So Nick, the trade-weighted dollar has fallen roughly 10%. How important is that move?

 

Nicholas Brooks [00:28:32]:

I think it matters a lot. We have seen downward pressure on the dollar over the past year or so. I think it stems from growing concerns about the dollar as the dominant reserve asset globally. And I think there are a lot of reasons for that, but at the bottom of it, I think is really this continued rise in the US government debt. So at the end of last year, the US debt-to-GDP level was at its highest point since the end of World War II. And when you look at independent forecasts, for example, from the US Congressional Budget Office or the IMF or the Yale Budget Lab and a variety of other sources that are independent, the trajectory of US debt is quite concerning. And the US has continued to run large fiscal deficits, and there is no prospect in the near term — at least there's been no indication from the Trump administration that they are planning to rein that in. And the US can get away with it for a while, as the world's main reserve currency. But I think investors are starting to become a little bit worried and are starting to diversify holdings. So that doesn't mean they're selling the US dollar wholesale, but investors, I think, are — and flow data would certainly indicate this — are starting to allocate more to alternative currencies and the assets in those regions. On top of that, of course, the ultimate, one might say, anti-dollar trade is gold. And I think one of the reasons the gold price has been moving up so quickly, and I think potentially could go further, is this diversification away from holding dollars, both by central banks, but also by individuals and by institutional investors. There are other factors such as concerns about Fed independence and what that might mean for long-term inflation, which of course has an impact on perceptions of where currency should be since that will affect real interest rate differentials.

 

Nicholas Brooks [00:31:05]:

I think there are concerns just about institutional stability in the US right now because policies seem to be quite ad hoc. So I think there are a variety of factors behind the weakening of the dollar. And I think until those issues are dealt with, that weakness probably continues. So currencies rarely move in a straight-line fashion, but I think structurally, there are good reasons for there to be pressure on the US dollar. And also, just to throw one more thing in, there are indications that many in the Trump administration, perhaps not all, but many in the Trump administration are happy or are okay or think a US dollar, a weaker US dollar is a good thing. Stephen Miran, who's on the Fed board now and the former head of the Council of Economic Advisers to the president, has written a paper that highlighted that a weaker dollar would be good for the US from a trade deficit point of view and potentially to bring investment back into the US manufacturing sector. There are also perceptions that perhaps the Trump administration isn't against further weakness in the dollar. Of course, nobody wants to see disorderly moves in the dollar, but there are also perceptions that a weaker dollar is not viewed necessarily as a bad thing by the Trump administration.

 

Christina McNamara [00:32:44]:

So to continue on that topic, there's certainly been a lot of focus on monetary policy over the last couple of years. And you've just suggested that we may need some fiscal tightening and that we could face potential further weakness of the dollar in 2026. Those are pretty significant calls. Can you walk us through the connection and why might the fiscal tightening become necessary? And how does that feed into your outlook for the dollar for this year?

 

Nicholas Brooks [00:33:17]:

As you indicate, everything tends to be linked. There are a few ways to look at this. The US is running large fiscal deficits and it doesn't look like that's going to change anytime soon. I'd be watching very carefully. If it does change, then the whole dynamic shifts. But at the moment, there doesn't seem to be much being done to rein in the fiscal deficit. That means the US debt-to-GDP continues to deteriorate. So far, bond investors have more or less ignored it.

 

Nicholas Brooks [00:33:47]:

We've had a few jitters. Back when Trump first made his announcements on reciprocal tariffs we saw some disorderly moves in the US government bond market, but it stabilized pretty quickly. So far the bond market has taken all this pretty much in stride. But if there's anything I've discovered from many years of being in public markets and watching bond markets is usually the way things work is everything's fine until one day they're not. It doesn't usually move in a gradual fashion when you're dealing with debt markets or frankly when you get into these situations with currencies and other liquid markets. When I look at the situation in the US my feeling is at some point the bond vigilantes are going to come out and start testing the US bond market. What triggers that is hard to know.

 

Nicholas Brooks [00:34:42]:

It's always hard to know what the trigger is, but I could see that scenario happening. Getting timing right on that is nearly impossible. And in that situation, my sense would be the way the Fed would probably react – and it's not about Fed independence or being independent or having a lack of independence – I think the way the Fed would react would probably be if it looked like it was really getting out of hand, they would intervene and probably move back towards some form of quantitative easing to stabilize US government bond yields. Now, I think they could do that and probably there'd have to be some adjustment on the fiscal side, or at least some indications that there was a desire to rein in the fiscal deficit. And then probably the bond market would stabilize. But I think the casualty in that type of scenario would be the US dollar because you're moving back into a QE scenario, which would be viewed, I think rightly, as potentially inflationary. And therefore, you would see a further weakening of the dollar.

 

Nicholas Brooks [00:35:52]:

So again, we'll have to see how this all plays out, but I do think that there is a growing risk of that type of scenario occurring down the line.

 

Chris Sparenberg [00:36:06]:

Since we're peering into 2026 and beyond with some monetary and fiscal policy, are there other key scenarios that you're modeling, just broadly speaking, for 2026?

 

Nicholas Brooks [00:36:18]:

I would say that at a macro level as I just highlighted what I think one of the biggest risks is government bond markets - in particular, the US. Though what's going on in Japan is interesting as well. But after that, I would say that it really becomes more about bottom-up analysis because I think the systemic risks are relatively low. And the likelihood of a big, broad crisis in the corporate household or banking system is pretty low. There are clearly idiosyncratic risks out there relating to sector and subsector dynamics. An obvious one, which has become a focus of investors' attention more recently is how will AI affect companies? I don’t think this is going to go away anytime soon because it's very hard to have a resolution to this anytime soon. That's one example. I also think the fact that longer-end rates are pretty high and in my view are likely to stay high for a while given government deficits - how are different corporates dealing with that? There are some areas that are benefiting from tailwinds and growth and some that are not. So I think as we move into 2026, with dispersion in performance growing, micro bottom-up analysis is going to become increasingly important.

 

Christina McNamara [00:38:08]:

We've talked about momentum in the market, improving activity, and where the cycles may be headed, but prudent investing always comes back to risk, especially in private markets. When you survey the landscape today, what are some of the biggest risks that private investors should be focused on? Where are you seeing some potential fault lines over the next 12 to 24 months?

 

Nicholas Brooks [00:38:36]:

I think at a broad macro level, as I've said, I don't see too much systemic risk. Corporate balance sheets broadly are in pretty good shape, as well as households and banks. It's really the government sector that I think is more worrying. But within private markets, because I don't see any major systemic risks, I think it really becomes a micro-analysis. There has been in public markets as well, but we also see in private markets more performance dispersion between companies. And I wouldn't say there's one theme that's driving this dispersion. Ultimately, often it comes down to management.

 

Nicholas Brooks [00:39:26]:

Sometimes there's just a bit of bad luck. And sometimes there's good luck. But I don't see any one single area of major risk. Of course, there's been a lot of focus recently on the potential disruption that AI might cause to business models. And I think that's valid. I think that needs to be looked at very closely. But again, from looking at some of the analyses that we've done at a micro level, you can have companies in almost precisely the same sector, and some are going to benefit from or are going to potentially benefit from developments in AI, and there are going to be others that do less well. So I guess to put it in a nutshell, I'd say I don't see any one area of key risk. We are dealing with interest rates higher than where they were a few years ago.

 

Nicholas Brooks [00:40:29]:

We're dealing with economic growth concentrated in a few key sectors. So I think that one has to be cautious about investing and very selective investing. But I think in the end, it's going to come down to company-by-company analysis.

 

Chris Sparenberg [00:40:51]:

And where do you see the opportunity in private markets?

 

Nicholas Brooks [00:40:55]:

I think there are a range of areas where there are some pretty good opportunities. Private credit yields are still attractive. So I think, structurally overall one is getting a pretty good return. There is an increasing move towards structured capital solutions. When you get into environments that are more complex and that are less unidirectional, I think structured capital solutions come into play. I think they come into play in most environments, but I think particularly in this kind of environment, they're attractive both to the corporates and to investors. Investors are able to get downside protection with still quite solid returns. From a regional point of you I think Europe is at a turning point.

 

Nicholas Brooks [00:41:50]:

I don't think we're going to see some massive V-shaped recovery coming through. But I think with the kind of reforms that Europe is moving ahead with and with the kind of fiscal spend that puts a floor under growth, I think that's providing positive momentum. And we have seen that in the relative performance of public markets, Europe versus US, so far this year as well. With liquidity an issue, I think secondary market opportunities are going to continue to see strong demand. And lastly, the trickiest one, and what investors need to focus on, is looking at the dispersion between companies, which means really rigorous bottom-up analysis. And this also likely means increasing dispersion between managers. So I think there are a number of levers that investors can pull, but broadly the outlook for quite a few segments of private markets is looking quite positive in my view as we move into 2026, 2027.

 

Christina McNamara [00:43:04]:

Now, you're certainly not new to sharing your thoughts and weighing in on macro trends, always reacting in real time to data releases, policy shifts, market swings, headlines. That kind of visibility can create pressure to have an immediate take on the market. How do you stay disciplined amid all that short-term noise?

 

Nicholas Brooks [00:43:32]:

I've been doing this a long time now, so I recognize how difficult it is to get short-term calls right on a consistent basis. Also the nature of our business, as I highlighted earlier, tends to be a longer-term time horizon on investing, which I appreciate and I think is the best way to invest. I do have to keep on top of what's going on every day, every week. We do have some higher frequency funds in liquid markets where we do need to be very much aware of what's happening more short-term. So I do keep on top of that. But really for me as I highlighted earlier, it's about having a framework on structural risks. And I think taking a balance sheet approach to analyzing the economy and global risks sets a good framework. And that's where I tend to keep my focus. And then overlay that with thematic and sector analysis where we see certain sectors with tailwinds and other sectors and other themes that might have headwinds.

 

Nicholas Brooks [00:45:00]:

I think these medium-term thematic and sectoral analyses provide value. That's where I try to focus my attention. It's always interesting to see how markets react to a payrolls number or to the latest news on AI. But ultimately, I think it's those structural and thematic factors that really drive performance in the long run. We have certainly seen resilient global economies and markets. And I'm not the only one that's been highlighting this. But I think a critical point to make is that underneath that resilience, there are a lot of crosscurrents. And there are sectors, themes, and specific companies that are performing well, and there are those that are performing less well.

 

Nicholas Brooks [00:46:03]:

So there are risks out there, no question. But I believe they are mostly idiosyncratic. I think one should not view macro resilience as meaning there's limited risk. It's just a different type of risk, and that tends to be the micro bottom-up risk that I think investors need to be watching. Obviously, we need to be watching for those systemic and structural risks as well, but on my analysis, those are pretty well contained for now.

 

Chris Sparenberg [00:46:38]:

And that brings us to the end of today's episode of Private Markets 360. We hope you enjoyed this deep dive into the macro signals shaping private markets in 2026 with our guest Nicholas Brooks, Head of Economic and Investment Research at ICG. Nicholas, thank you again for sharing your expertise and giving us such a thoughtful, data-driven view of where the global economy private capital may be headed. Your insights on resilience, risk, and opportunity across regions and asset classes add invaluable context for investors navigating an environment that remains anything but predictable. For our listeners, thank you for spending time with us. If today's episode sparked new ideas or sharpened your perspective, please subscribe and share it with colleagues and peers to help them discover the show and join the conversation. On behalf of our team, thank you for tuning in. We look forward to having you with us next time on Private Markets 360 for more expert insights and in-depth discussions shaping the future of private markets.

Chris Sparenberg [00:47:37]:

Until next time, take care and stay informed.