Rebalancing Act: Rethinking Growth Versus Value

Heading into 2025, a handful of mega-cap tech companies had tilted the U.S. public equity markets meaningfully into growth territory. Recent gyrations have revealed the potential risk in such positioning, and offered yet more evidence for why we believe it is time to rebalance portfolios by increasing exposure to value.

This paper addresses the notable growth tilt across both public and private equity (PE) portfolios, as well as the potential risk if further impressive gains prove more elusive than expected.

In line with our new-year outlook, “Solving for 2025”, we believe tech earnings growth will likely moderate from here and that, while volatility may continue, broadening economic growth should benefit more cyclical sectors and value stocks.