Franklin Templeton Sees Opportunities in Private Equity, Private Credit, Real Estate, and Infrastructure

Key Terms

private equity secondaries financial

A market where existing ownership stakes in privately held companies or positions in private equity funds are bought and sold between investors after the original deal is made, like a resale market for houses rather than new builds. It matters to investors because it provides a way to convert hard-to-sell, long-term holdings into cash, creates a transparent price signal for private assets, and lets investors adjust risk and returns without waiting for a company sale or fund wind-up.

asset-based finance financial

Asset-based finance is a type of lending where a company borrows money using tangible assets—such as accounts receivable (invoices), inventory, or equipment—as security, similar to using a valuable item as collateral at a pawn shop. Investors care because it affects a firm's access to cash and its risk profile: more asset-backed borrowing can provide quick funding but also ties borrowing limits to the value and liquidity of those assets.

commercial real estate debt financial

Loans made to buy, build, refinance or operate income-producing properties such as office buildings, apartment complexes, shopping centers and hotels; the property itself typically secures the loan, so lenders can claim it if payments stop. Investors care because the health of this debt influences property owners’ ability to pay, shapes bank and real-estate firm balance sheets, and can affect the income and market value of related stocks and bonds — think of it like a mortgage on a rental building that determines whether the landlord can keep paying investors.

digital infrastructure technical

Digital infrastructure consists of the underlying technology systems that enable the storage, transmission, and processing of digital information, such as internet networks, data centers, and cloud services. It functions like the roads and utilities that keep a city running, allowing digital activities to happen smoothly and reliably. For investors, strong digital infrastructure is essential because it supports the growth of digital services and can influence the stability and efficiency of the broader economy.

decarbonization technical

Decarbonization is the process of cutting a company’s greenhouse gas emissions across its operations, supply chain and products by switching to cleaner energy, improving efficiency and changing materials or processes. For investors it matters because lower emissions can reduce regulatory and energy costs, limit legal and reputational risks, and signal long-term competitiveness—like a business replacing a gas-guzzling fleet with fuel-efficient or electric vehicles to save money and stay compliant.

deglobalization technical

Deglobalization is the trend of nations and companies reducing reliance on cross-border trade and long international supply chains, instead favoring local or regional sourcing and tighter trade controls. For investors it matters because it can shift costs, profit margins, growth opportunities and risk exposure—similar to a family deciding to buy more from nearby stores: prices, availability and where money flows all change, affecting which businesses gain or lose value.

Franklin Templeton Institute sees attractive opportunities across the private markets, as the firm continues to meet the growing demand for private market solutions in 2026 with global expansion and product innovation

SAN MATEO, Calif.--(BUSINESS WIRE)-- Franklin Templeton today released its 2026 Private Markets Outlook highlighting key macro-themes and where they see the most attractive opportunities for investors in 2026 and beyond.

“We see compelling opportunities across private markets in 2026 and beyond. While some sectors may face headwinds, others boast strong fundamentals and stand to benefit from ongoing structural shifts,” said Tony Davidow, Senior Alternatives Strategist at the Franklin Templeton Institute. Our highest-conviction opportunities for the year ahead include private equity secondaries, commercial real estate debt, real estate, and infrastructure.”

Themes for 2026: Optimism and Opportunity Across Private Markets

Private equity

While exits have begun to pick up, many institutions are still in need of liquidity, and some have instituted formal secondary programs to fulfill their needs. We see growing opportunities for both LP-led and GP-led transactions. Secondaries also provide several structural advantages including shortening the J-curve and time to distribution, and providing diversification across vintage, GP, geography and industry.

Private credit

Over the last several years, most of the global flows in private credit have been in direct lending. Consequently, direct lending spreads have compressed and there are growing concerns. We find more attractive opportunities with asset-based finance (“ABF”) and commercial real estate debt (“CRE debt”). We believe that CRE debt represents one of the most compelling opportunities, given the substantial ‘wall of debt’ scheduled for refinancing in the years ahead.

Real estate

Real estate valuations have fallen sharply from their 2021 peak, driven by sustained market headwinds and ongoing uncertainty in the office sector. In fact, many properties are now available below their replacement costs. While concerns about the office sector persist, we believe multi-family, industrial warehouse, necessity retail, and other sectors represent compelling investment opportunities.

Infrastructure

We believe that infrastructure represents an emerging opportunity. From a thematic perspective, we favor digital infrastructure, decarbonization, deglobalization, and demographics. Digital infrastructure includes data centers, fiber optics, and cell towers. Decarbonization and energy transformation reflects the growing emphasis on climate change and the need to respond and rebuild. Deglobalization is a trend reflecting the need to reshore our supply chains and logistics; and demographics is the need to respond to population growth in certain regions, and aging demographics in others.

Overall, the Franklin Templeton Institute believes that manager selection will remain critical in distinguishing amongst the winners and losers, where we anticipate a larger dispersion of returns. We also believe that there will be a significant difference in the deployment of capital today versus older vintages (e.g., 2020-2023) from a valuation and negotiation perspective.

“The demand for private markets has accelerated significantly over the past several years, and we’ve been highly focused on scaling both our global reach and our capabilities to meet that demand,” added Dave Donahoo, Head of Americas, Wealth Management Alternatives. “In addition to expanding Franklin Templeton’s presence across EMEA, APAC, LatAm, and Canada, we’ve broadened our product shelf and deepened our distribution resources to better serve our diverse, global client base.”

About Franklin Templeton

Franklin Templeton is a trusted investment partner, delivering tailored solutions that align with clients’ strategic goals. With deep portfolio management expertise across public and private markets, we combine investment excellence with cutting-edge technology. Since our founding in 1947, we have empowered clients through strategic partnership, forward-looking insights, and continuous innovation – providing the tools and resources to navigate change and capture opportunity.

To learn more, visit franklintempleton.com and follow us on LinkedIn.

Franklin Resources, Inc. [NYSE: BEN]

Key terms:

Secondaries: Private equity secondaries are transactions that offer liquidity solutions to owners of interests in private equity and other alternative investment funds.

J-curve: The “J-curve” is the term commonly used to describe the trajectory of a private equity fund’s cashflows and returns. An important liquidity implication of the J-curve is the need for investors to manage their own liquidity to ensure they can meet capital calls on the front-end of the J-curve.

Replacement cost: the price that it would cost to replace an existing asset with a similar asset at the current market price.

This material is intended to be of general interest only and should not be construed as individual investment advice or a recommendation or solicitation to buy, sell or hold any security or to adopt any investment strategy. It does not constitute legal or tax advice. This material may not be reproduced, distributed or published without prior written permission from Franklin Templeton.

The views expressed are those of the investment manager and the comments, opinions and analyses are rendered as at publication date and may change without notice.

All investments involve risks, including possible loss of principal. The value of investments can go down as well as up and investors may not get back the full amount invested.

Investment strategies involving Private Markets (such as Private Credit, Private Equity and Real Estate) are complex and speculative, entail significant risk and should not be considered a complete investment program. Such investments viewed as illiquid and may require a long-term commitment with no certainty of return. Depending on the product invested in, such investments and strategies may provide for only limited liquidity and are suitable only for persons who can afford to lose the entire amount of their investment. Private investments present certain challenges and involve incremental risks as opposed to investments in public companies, such as dealing with the lack of available information about these companies as well as their general lack of liquidity. There also can be no assurance that companies will list their securities on a securities exchange, as such, the lack of an established, liquid secondary market for some investments may have an adverse effect on the market value of those investments and on an investor's ability to dispose of them at a favorable time or price.

Infrastructure Investments: An investment in infrastructure projects can be exposed to numerous risks that may not offer recourse to the project sponsor and investors. For example, delays in obtaining necessary permits or a shift in political or public sentiment could hinder progress or cause a project to terminate. Other risks that can impact an infrastructure investment include, but are not limited to: construction delays, environmental concerns, contract or labor disputes, or financial/default risks from a deterioration in a sponsor’s credit.

This material is intended to be of general interest only and should not be construed as individual investment advice or a recommendation or solicitation to buy, sell or hold any security or to adopt any investment strategy. It does not constitute legal or tax advice. This material may not be reproduced, distributed or published without prior written permission from Franklin Templeton.

The views expressed are those of the investment manager and the comments, opinions and analyses are rendered as at publication date and may change without notice. The underlying assumptions and these views are subject to change based on market and other conditions and may differ from other portfolio managers or of the firm as a whole. The information provided in this material is not intended as a complete analysis of every material fact regarding any country, region or market. There is no assurance that any prediction, projection or forecast on the economy, stock market, bond market or the economic trends of the markets will be realized. The value of investments and the income from them can go down as well as up and you may not get back the full amount that you invested. Past performance is not necessarily indicative nor a guarantee of future performance. All investments involve risks, including possible loss of principal.

Any research and analysis contained in this material has been procured by Franklin Templeton for its own purposes and may be acted upon in that connection and, as such, is provided to you incidentally. Data from third party sources may have been used in the preparation of this material and Franklin Templeton ("FT") has not independently verified, validated or audited such data. Although information has been obtained from sources that Franklin Templeton believes to be reliable, no guarantee can be given as to its accuracy and such information may be incomplete or condensed and may be subject to change at any time without notice. The mention of any individual securities should neither constitute nor be construed as a recommendation to purchase, hold or sell any securities, and the information provided regarding such individual securities (if any) is not a sufficient basis upon which to make an investment decision. FT accepts no liability whatsoever for any loss arising from use of this information and reliance upon the comments, opinions and analyses in the material is at the sole discretion of the user.

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Source: Franklin Templeton