August 2024 Private Performance

August 2024 saw continued volatility in the public markets, with inflationary pressures and rising interest rates causing investor uncertainty. However, private investments demonstrated their ability to outperform during periods of market stress, offering both stability and growth. Our clients' portfolios, which include funds across private equity, real estate, and credit, capitalized on these opportunities, posting strong returns despite broader market challenges. In this post, we explore how key funds—such as BlackRock Private Investments Fund (BPIF), iDirect Private Markets Fund, and others—delivered during this dynamic period.

Private Equity: A Glimpse Into Innovation

The BlackRock Private Investments Fund (BPIF) continued its robust performance in August, returning 2.35%. A key driver of this return was private equity investments, along with secondary investments, which delivered a 21% gross and 20% net return over the last twelve months. The fund's portfolio includes dynamic investments in areas like education finance in India, cloud-based business solutions, and advanced cell therapy. While certain sectors—such as software, hospital laundry, and veterinary services—detracted slightly, the fund’s overall growth potential remains strong. BPIF's relatively young portfolio, with most direct investments averaging two years, suggests there is much more growth to come.

Similarly, the iDirect Private Markets Fund posted a 1.29% return for its Class I shares in August, bringing its year-to-date return to 6.30%. The fund’s diversified private equity exposure includes allocations to industry leaders like KKR, Warburg Pincus, and Vista Equity Partners. With key investments in sectors such as healthcare and technology, iDirect has been successful in navigating market fluctuations while maintaining a long-term focus on capital appreciation, boasting a 12.51% return over the past year.

Private Real Estate: Steady Growth and Unique Assets 

Both Nuveen Global Cities REIT (GCREIT) and Blackstone Real Estate Income Trust (BREIT) demonstrated the resilience of high-quality real estate investments. GCREIT benefited from rising global transaction volumes and stable property prices, with its focus on industrial, necessity retail, healthcare, and international real estate sectors providing a steady foundation for future growth. BREIT, with its strategic concentration in fast-growing Sunbelt markets and minimal exposure to office spaces, achieved a strong 9.9% annualized net return since inception, further solidifying its status as a top performer. These funds continue to generate tax-efficient income and solid returns for investors, even amid broader economic challenges.

Private Credit/CLO: Steady Yield in Changing Times 

In the private credit space, C•TAC and BCRED have showcased strong performance by adapting to shifting market conditions. With $3.5 billion in assets, C•TAC’s flexible strategy has allowed it to deliver an impressive 10% annualized distribution rate, while BCRED, with $60.4 billion in assets, has maintained a 10.3% annualized distribution rate. Both funds provide solid income streams, though their approaches and risk profiles differ. Additionally, the Priority Income Fund continues to stand out with its stable 11-12% dividend range, making it an attractive option for investors seeking higher returns, despite its slightly higher volatility.

Conclusion: Diversification for Stability and Growth 

The August 2024 performance of private investment funds highlights their ability to deliver consistent returns, even amid public market volatility. By focusing on high-growth sectors, resilient asset classes like real estate, and income-generating private credit, our clients' portfolios remain well-positioned for both stability and long-term growth. As we move into the final quarter of the year, these funds are primed to continue providing strong risk-adjusted returns, offering confidence in an uncertain economic landscape.

Do you have questions about your portfolio? Reach out today to ensure your investments are aligned with your financial goals.

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1. https://www.breit.com/performance/
2. https://www.nuveen.com/gcreit/performance
3. https://www.bcred.com/performance/
4. https://www.carlyle.com/ctac
5. https://www.priorityincomefund.com/
6. https://idirectpmfund.com/idirect-pm-fund/performance/#performance
7. https://bpif.com/portfolio-and-performance/default.aspx

_{This content is developed from sources believed to be providing accurate information. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.}