Portfolio Special Report

Private Markets Meet Higher Rates: Don’t Bank On 2000 Risk Premiums

Brian Payne, Head of Portfolio Construction

Private Markets Private Real Estate Private Infrastructure

Published on

14 Oct 2026

With capital locked up for years, scenario analysis is especially valuable for Private Market investors. We provide a framework for mapping returns on new investments if the US 10-year yield hits 6.5%, a level last seen in 2000. Just do not expect the risk premiums of that era.

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Contents

Executive Summary
Private Market Scenarios Have More Moving Parts
Two Rate Shocks, Two Different Stories
Private Equity: If Rates Rise, Better Fast Than Slow
Private Credit: A Gradual Rate Rise Brings Lower Defaults
Infrastructure: Strong EBITDA Growth In A Gradual Rise
Real Estate: Cap Rate Sensitivity To Yields Is A Swing Factor
Don’t Expect Private Market Risk Premiums To Return To 2000 Levels

Topics covered

Private Real Estate Private Infrastructure Private Markets

Private Markets Meet Higher Rates: Don’t Bank On 2000 Risk Premiums

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