The private financial markets have grown exponentially in recent decades, but are the tail ones that supported their growth turning into headwinds?

So for a variety of reasons, obviously the equity markets have come off, so the denominator of fact is slowing things.

This pace of investment, I think, could just slow down, which will slow the fundraising.

So we're going to go from Phernatic to a fast pace, faster than, let's call it, it average but I do believe the fundraising

pace is going to slow during the course of this year and into next year.

I'm Allison Nathan and this is exchanges at Goldman Sachs. The growth of the private markets has sharply accelerated in recent years as

ultra-loose monetary policies drove investors towards illiquid markets that offered higher yields.

But the private markets are also facing fresh challenges with rising interest rates and greater regulatory scrutiny.

To help us break down the challenges and opportunities facing private market investors,

I'm sitting down with Mike Kuster, co-president of the Alternatives

business within Goldman Sachs's Asset Management Division. Mike, welcome to the

program.

Now, listen, thanks for having me. So Mike, just to set the stage, we hear a lot about private markets, but not sure that's really well understood. What do private markets actually encompass?

Sure. So the private markets or the alternative space, those words are used interchangeably.

Effectively, those are any investment that doesn't fit the public markets, a bond, a stock,

or frankly, cash or a loan.

So an alternative investment is something

that's an alternative to that typical equity,

public equity or bond.

Within that, the biggest areas are private equity,

which is generally about 60% of the asset class. Private equity. private equity would include leverage buyouts, growth equity, venture capital as examples.

So that's the biggest part of the private markets. Real estate would be the next biggest, which is quite substantial. So that could be development of real estate or long-term ownership of different types of real assets. Infrastructure, which as the name would suggest, is buying roads,

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