76% of global respondents believe private market conditions will improve within five years, with deal growth resulting in the growth of special purpose vehicles (SPVs), a study has shown.
The study by business administration and compliance solutions provider CSC conducted on C-suite executives and senior professionals has revealed a shift in market sentiment among private markets professionals. According to the findings, over a quarter (29%) believe conditions for deal making will improve within the next year or are already seeing improvement. Additionally, nearly half (46%) expect market conditions to enhance within the next two to five years, driving the growth of SPVs.
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The study, which includes insights from professionals in private equity, private debt, real estate and infrastructure sectors across Europe, the US, and Asia Pacific, highlighted the role of SPVs in optimising private market investments. Private debt professionals emerged as the most optimistic group, with 67% anticipating better market conditions in the coming years.
Geographically, respondents from Asia Pacific were the most cautious, with only 16% expecting improvements within the next year. In contrast, 37% of North American and 33% of European respondents said they see a more immediate positive shift in market conditions.
Thijs van Ingen, global market leader at CSC Corporate and Legal Solutions, said: “Our study has found far more optimistic sentiment among senior private markets professionals, following a few years of significant market volatility, which bodes well for the wider investment sector and global economy.” This optimism is strong among private debt professionals, reflecting a broader market trend towards private debt.
As the private markets begin to recover from recent volatility, the use of SPVs has also increased. However, managing these structures has become more complex due to multi-jurisdictional regulations, stricter reporting requirements, and the need for detailed data. Delphine Jones, MD of CSC Client Solutions, said: “SPVs have become increasingly complex, and far more work needs to be done to manage them—particularly when you factor in new regulations and requirements.”
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The CSC research also showed that most firms currently use two outsourcing partners and plan to increase this number in the coming years. According to the findings, key criteria for selecting an SPV administrator include reputation, technology and the ability to provide a sophisticated technology platform.
Van Ingen further added: “Many cited technology as an important factor when selecting their SPV administrator.” “This includes optimizing deal sourcing, investment, aiding portfolio performance, and many other areas. Consolidating SPV administration to a single outsourcing partner globally can help streamline processes and reduce complexity.”
