Issue 03 · November 2026
Titanbay's read on what is actually moving in private markets, and what it means for the people who have to operate through it.
The month in five numbers
Political risk eased in the US and rose in Europe over the past month, but the cost of capital is still creating pressure on both sides of the Atlantic. Long-term yields came off their highs after the US midterms, yet central banks are still leaning towards tightening, and the Bank of England has already moved.
At the same time, public markets sent two clear signals. Investors still believe in AI demand, but they have started to punish spending that runs ahead of returns. And the IPO window is open again, but only for the largest names, with Anthropic’s listing the next test. Both matter for private markets, because they shape how private assets are marked and how they get sold.
Underneath, private credit defaults set another record and Europe’s political strain is feeding into the base rates its deals are financed on. Liquidity is returning at the top of the market. For most of the industry, the backlog is still being worked through secondaries and continuation vehicles.
Democrats won control of both the House and the Senate on 3 November, ending one-party control in Washington. Counting is still under way in some races, so final seat numbers may shift.
Markets read the result as a reduction in political and fiscal risk. On 4 November the Dow rose more than 1,500 points, about 3%, and the S&P 500 gained 1.6%, while the 10-year Treasury yield slipped to around 4.9% as traders bet a split Congress would restrain deficit spending. Health care and renewables led, while defence, neocloud and chip stocks lagged, the latter on concern about limits to data centre construction.
For private markets, lower long-end yields would ease financing pressure if they hold, but the policy agenda becomes harder to predict. Expect fewer large tax or spending changes, closer scrutiny of AI infrastructure build-outs, and more friction on energy and defence policy, all relevant to sponsors with exposure to those sectors.
The Federal Reserve held at 3.75% to 4.00% on 28 October, but two members voted for a hike, leaving a December move in play. The ECB held its deposit rate at 2.50% on 29 October, with the decision unanimous but a hike discussed. The Bank of Japan held at 1.25% on 30 October in an 8-1 vote, with the dissenter arguing that underlying inflation has already reached its 2% target.
The Bank of England did not wait. On 5 November it raised Bank Rate by 25bp to 4.00%, with its next decision due on 17 December.
Long-term borrowing costs remain the dominant constraint. The US 10-year yield closed as high as 5.31% in October before easing to around 4.9% after the election. Leveraged buyouts and refinancings continue to price off a base rate that has not come down.
Late-October results confirmed strong AI demand but punished companies whose spending ran ahead of profits.
Microsoft beat expectations, with Azure revenue up 48% and capital spending, including finance leases, of $45.2bn, and guided to about $170bn of capital spending for calendar 2026. Its shares rose about 4% after hours. Alphabet’s Cloud revenue more than doubled, but Search growth slowed to 12% and capital spending reached $51.4bn. Its shares fell about 13% the next day, its worst day on record, wiping about $500bn off its value. Amazon’s trailing 12-month free cash flow turned negative, at minus $42.4bn, against a capital spending plan of about $220bn for 2026, and its shares fell about 7% after hours. Apple reported a September-quarter record of $114.5bn in revenue, up 12%.
Investors are now rewarding returns on AI spending, not spending alone. For private markets, AI infrastructure demand still exceeds supply, which supports data centre, power and AI-adjacent platforms. But public market discipline will feed into private software and AI valuations through the comparables used to mark them, which matters most for growth equity and software-heavy credit books.
2026 is already a record year for US IPO proceeds, but it is dominated by a handful of very large listings. Through mid-October, 114 US IPOs raised $147.6bn, about half of it from SpaceX’s June listing at a $1.77tn valuation. SK hynix’s $26.5bn listing showed the market can absorb very large deals. The next test is Anthropic, which filed its registration statement publicly on 26 October for a Nasdaq listing under the ticker "ANT". No price range or date has been set.
The window is selective, though. Six sizeable offerings were postponed or withdrawn in September. Global private equity exit value rose 65% to $482bn in Q3, but most of that value sat in a small number of large transactions. Secondaries remain the main liquidity tool for everything else, with 2026 volume expected at a record of around $250bn on William Blair’s survey and up to about $275bn on Lazard’s.
For private markets, the largest, highest-quality assets have a credible public exit route for the first time since 2021, which should help distributions from late-stage venture and growth funds holding AI names. Mid-market buyout assets remain reliant on sponsor-to-sponsor sales and continuation vehicles.
Fitch’s US private credit default rate rose to 6.3% for the 12 months to Q3, a new record, up from 6.0% in Q2. Most of the 27 default events in the quarter were maturity extensions, interest deferrals or new payment-in-kind terms, and industrials and consumer products and services were the weakest sectors, both at 9.7%. Narrower measures tell a different story: Proskauer’s index, which counts only payment and covenant defaults, was about 2.4%, so the number depends heavily on definition.
The regulatory focus on insurers’ private credit holdings is moving towards capital rules. The NAIC is weighing tougher capital requirements for offshore life reinsurance deals that leave insurers holding less capital than US standards require, and on 7 October Cayman reinsurers pushed back, arguing no capital shortfall has been shown. Bermuda’s long-term sector holds more than $1.5tn of assets, much of it tied to alternative asset managers.
No proposal is final yet, but any capital charge on offshore reinsurance would raise the cost of the insurance balance sheets that fund much of private credit’s growth.
The US has just lowered its political risk premium, and Europe is raising its own. Weak governments in France and Germany are pushing up sovereign spreads, which feed directly into the base rates European deals are financed on.
France is the main pressure point. Prime Minister Lecornu leads a minority government facing a hostile parliament over the 2027 budget. The deficit is expected at 5.4% of GDP in 2026, and debt stood at 115.7% of GDP in 2025. The French-German 10-year spread was around 155bp on 29 October, with the OAT near 4.9%, after peaking at 176bp on 23 October. Prediction markets give Marine Le Pen a 40% chance of winning the 2027 presidency.
Germany’s coalition is weakening. Only 10% of Germans were satisfied with Chancellor Merz’s government in an ARD poll on 1 October, a record low, with the AfD leading national polls. Spain also holds a general election on 29 November.
European rates have taken a hawkish turn. The ECB discussed a hike in October, and the Bank of England raised its headline rate by 25bp to 4.00% on 5 November.
Deals and exits are lagging the US. European private equity deal value fell 10.9% quarter on quarter in Q3, and US investors backed a record 45.7% of it. European IPOs raised about €8.8bn year to date, and EY puts deal numbers and proceeds up 35% and 28% on 2025. Sponsors now run dual-track sale and IPO processes as standard.
Governance matters for private markets through three channels. Higher sovereign spreads raise financing costs, political uncertainty delays IPOs and large exits, and a shift towards populist governments in 2027 could slow EU capital markets integration, such as the Savings and Investments Union. Europe’s structural tailwinds, including AIFMD II and the growth of ELTIFs, depend on that integration continuing.
First, whether the Fed hikes on 9 December, and whether the ECB and Bank of Japan follow. A second round of tightening would land just as long-end yields have started to ease.
Second, whether Anthropic’s listing prices and trades well. A strong debut would reinforce the public exit route for the largest private assets. A weak one would push more sellers back towards secondaries and continuation vehicles.
Third, how insurance capital rules land, and how French politics shapes the 2027 budget. Both feed directly into the cost and availability of the capital private markets rely on.
For asset managers, liquidity is reaching the best assets first, and valuations of AI-exposed holdings will increasingly be tested against public comparables. For allocators, it argues for looking past headline default rates to how private credit returns are being paid, and for treating European sovereign risk as part of the financing picture, not just the political one.
Private Markets Pulse is published monthly.
This article is for information purposes only. It reflects the personal views of the author, which may change without notice. They do not necessarily represent the views of Titanbay. Nothing in this article is investment, legal, tax or other advice. It is not investment research, a recommendation, or an offer or solicitation to buy or sell any financial instrument or invest in any fund. It does not take account of any reader’s objectives, financial situation or needs.
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