• Victoria Ivashina


2022, Paper: "The consistent growth of long-term alternative asset managers in the past four decades coincided with the secular decline in interest rates. This has been an important tailwind for the industry’s development as debt markets became increasingly cheaper and, at the same time, institutional investors were searching for ways to offset the shrinking yields on their fixed income portfolios. These forces have been essential to understanding the industry’s growth despite the rise in competition, valuations and, relatedly, the private equity industry’s shrinking returns. The past decade, however, has marked the new monetary policy regime: short-term rates (the traditional monetary policy tool) have been trapped at zero. While the rates might start to rise again, what is clear is that the favourable dynamic of declining rates that for decades drove capital into the alternative space will no longer be there. This development is likely to redefine the role and economic significance of the private equity industry in the decades to come. This report expands on the dynamics at play that shape the development of the global long-term investments industry and its interaction with monetary policy and explores the consequences of deceleration in its growth."

Non-HKS Harvard Author Website - Victoria Ivashina