NEW YORK — Turning Rock Partners, a women-founded and led private investment firm, has released its 2025 white paper, State of the Markets & Private Credit Outlook, offering analysis on current market conditions and highlighting the resilience and potential of private credit amid heightened economic uncertainty.
According to the report, economic indicators entering 2025 are mixed, with policy direction from the Federal Reserve unclear and ongoing geopolitical tensions contributing to volatility. Rising uncertainty is affecting corporate planning and market sentiment, even as U.S. corporate profits remain near record highs and unemployment stays low.
The paper also addresses trade policy, noting that the administration’s latest tariff regime is creating short-term market volatility. Credit spreads have widened, and equity markets have reacted with increased instability. While historical patterns suggest that sentiment around new tariffs tends to normalize after a few quarters, the near-term effects—especially on imports and consumer spending—could be significant.
Turning Rock’s outlook identifies private credit as a bright spot. The asset class maintained a yield premium in 2024 compared to traditional fixed income instruments and demonstrated lower-than-expected default rates. The report highlights private credit’s role in portfolio diversification and its growing appeal to investors navigating market uncertainty.
The firm also points to the expanding opportunity set in private markets. The number of private equity-backed companies in the U.S. now exceeds the number of publicly listed firms, and private credit has been financing a growing share of non-leveraged buyout transactions—surpassing the broadly syndicated loan market.
In particular, U.S. middle-market companies stand out. These firms reported revenue growth six times greater than the S&P 500 over the past 12 months, despite broader investor caution. Business leader optimism in the middle market remains high, suggesting continued momentum.
Turning Rock emphasizes a disciplined approach in the current environment, focusing on resilient business models, tight duration, moderate leverage, and management teams with proven track records in challenging conditions.
