“Capital solutions” has become a catch-all moniker within private markets, leaving many asset allocators to scratch their heads as to what these funds actually do and the risks they take.

We believe these hybrid middle-of-the-stack financing arrangements—designed to offer additional liquidity for private equity sponsors—can potentially offer investors higher yields than traditional debt, but with greater protection than common equity.

In our new paper, we explore various capital solutions strategies and their potential to deliver attractive risk-adjusted returns within broader private market portfolios.