Investment Insights

June 30, 2025

Private Markets and the Power of Long-Term Vision

In a year where headlines have been dominated by policy shifts and market volatility, private markets have continued to demonstrate their strength: the ability to invest in long-term transformation.

Q2 2025 | All data referenced in this article as of June 30, 2025 unless otherwise noted

In a year where headlines have been dominated by policy shifts and market volatility, private markets have continued to demonstrate their strength: the ability to invest in long-term transformation. While public markets quickly reacted to short-term uncertainty, private investments quietly advanced in Q1 of 2025 — with a focus on scaling businesses and creating value over multi-year horizons.

A Strong Start for Private Markets

Despite the turbulence in public equities, private market asset classes posted positive returns to start the year. According to Cambridge Associates, private equity indices were up +1%¹ through Q1 with buyouts showing particularly strong momentum (+8% annualized over two years²). Venture capital, while slower to recover, is showing renewed energy, especially in sectors like AI, cybersecurity, and life sciences.

In our view, this divergence from public markets highlights a key strength of private markets: their ability to focus on long-term value creation, rather than short-term sentiment. In uncertain environments, that focus becomes even more valuable.

AI: A Catalyst for Innovation and Investment

Artificial intelligence has emerged as one of the most powerful forces shaping both the economy and the private investment landscape. In recent months, category-defining companies in AI — such as OpenAI, Databricks, Anthropic, and others — have attracted significant capital at rising valuations. These businesses are not only transforming industries, but also redefining what’s possible in areas like healthcare, defense, and enterprise software.

Private investors are playing a critical role in this transformation. By backing AI-powered companies early in their lifecycle, they’re helping to accelerate innovation and bring cutting-edge technologies to market. This includes everything from autonomous systems and cloud security to AI-driven data management and productivity tools.

The Advantage of a Long-Term Horizon

One of the greatest strengths of private investing is the ability to look beyond the noise. Skilled managers can take a multi-year view, working closely with companies to drive growth, improve operations, and unlock value over time. This approach is particularly powerful in today’s environment, where short-term uncertainty often obscures long-term opportunity.

For investors with the ability to commit capital over longer periods, private markets offer a compelling complement to public investments. They provide access to differentiated return streams, potentially reducing reliance on public market cycles and can align well with goals like legacy building and intergenerational wealth transfer.

The Importance of Consistency and Diversification

At SCS, we emphasize consistent pacing and broad diversification across private market strategies. This means committing capital across multiple vintage years, investment strategies (like venture capital, growth equity, and buyouts), and investment types (like primary funds, secondaries, and direct co-investments) to build a resilient and well-balanced portfolio.

We also prioritize access to managers with proven track records of identifying and scaling transformative companies. Relationships with these types of skilled managers are built over time and are critical to sourcing high-quality opportunities.

Shaping the Future Through Thoughtful Private Investment

Just as families benefit from articulating their values and aligning their wealth with purpose, private market investment benefits from intentionality. Through supporting innovation, backing great teams, and building something enduring, investors can also benefit.

Private markets are not without risks like illiquidity and the permanent loss of capital. They require patience, diligence, and a willingness to embrace complexity, but for those who are prepared, they offer a powerful way to invest in the future — and to help shape it.

Returns from Cambridge Associates. Private Equity represented by a blend of 70% to U.S. Buyout funds and 30% to U.S. Venture Capital / Growth Equity funds, as defined by Cambridge Associates.
Cambridge Associates US Buyout funds as of 3/31/2025.

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IMPORTANT DISCLOSURES

The views expressed in this document, and the description of data supporting these views, are those of SCS Financial Services (together with its affiliates, “SCS”). The materials contained herein do not constitute an offer to sell or a solicitation of an offer to buy any security. Any such offering or solicitation can be made only by means of delivery of a definitive Confidential Private Placement Memorandum (“Offering Memorandum”) which sets forth in detail the terms and conditions of the offering and the applicable risk factors and should be reviewed in its entirety prior to investing. Securities may not be offered, sold or delivered to any prospective investor who does not satisfy certain minimum financial and sophistication criteria, or in any jurisdiction in which such offer is not authorized. SCS does not provide tax, accounting or legal advice and prospective investors should consult their professional advisers as to the tax or legal consequences of any potential investment.

The information in this document is as of the date indicated and is subject to change without notice. In preparing this document, SCS has relied upon certain information provided by third parties without independent verification of the accuracy or completeness of such information and SCS accepts no liability for any direct or consequential losses arising from its use.

Forward Looking Statements
Certain statements contained in this document may be forward-looking statements. By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. Forward-looking statements that reference past trends or activities should not be taken as a representation that such trends or activities will necessarily continue in the future. Any economic or market forecast presented herein reflects the judgment of SCS as of the date of this material and is subject to change.

Risks
All investments risk loss of capital and there is no guarantee that an investment will achieve its investment objective. Private Fund investments in particular involve significant risks and are intended for experienced and sophisticated investors. Some of the risks associated with an investment in Private Funds include: (i) use of leverage or other speculative investment practices, (ii) illiquidity of investments including restrictions on transfers, (iii) potential multiple layers of fees and expenses, and (iv) lack of comprehensive regulatory regime. For a complete description of the risks associated with such investments please review the “Risk Factors” and “Conflicts of Interest” sections in the relevant Offering Memorandum.

Performance and Fees
Performance for the most recent time period presented may be based on estimated returns and is subject to change. Performance of individually managed accounts will vary based on constraints, timing, funding levels and other factors and may be lower or higher than any performance shown herein. Past performance is not a guide to future results.