Building financial resilience: navigating volatile markets with private assets
May 29, 2026
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6 min
In today’s rapidly evolving economic landscape, achieving genuine financial resilience is a key objective for investors seeking long-term wealth preservation and growth. While public markets can experience rapid and significant price fluctuations, private assets can offer a different risk-return profile, often characterised by lower correlation to public markets and an illiquidity premium, which can contribute to overall portfolio resilience. What’s more, a dynamic combination of private assets can help optimise investors’ diversification strategy.
For Philippe Faget, Head of Private Assets at VEGA Investment Solutions, multi–private asset investing involves more than just diversification; it is about cultivating a portfolio that withstands turbulence through adaptive allocation, rigorous fund manager selection, and a well-considered geographical diversification. It is about the investor charting a deliberate course in navigating private markets.
The strategy of adaptive allocation: steering through market tides with purpose
Private assets, that is to say, infrastructure, real estate, private equity, and private debt, represent tangible economic drivers that typically exhibit lower correlation with public markets. By strategically allocating capital across these distinct private domains, adjusting exposures as macro-economic conditions evolve, and diversifying across geographies and investment types, investors can build a portfolio core that is less exposed to sharp public market downturns. The objective is to construct a more stable and diversified core, designed to absorb shocks and enhance overall portfolio resilience.
“In today’s rapidly changing markets, private asset investors cannot rely on a static investment strategy,” states Philippe Faget. “In our view, truly resilient portfolios require an adaptive allocation strategy that can pivot across different private asset classes and geographies as macro conditions evolve.”
Adaptive allocation means adjusting capital between private asset classes as macro-economic conditions change. It implies understanding and analysing how these asset classes behave in various market conditions, and beyond that, being able to navigate them even when they do not always behave as textbook examples might suggest. Experienced allocators recognise that regional and sector-specific contexts can present both amplified risks and differentiated opportunities. For example:
- Navigating inflationary environments
Experts like Philippe Faget’s team will go beyond simple private asset class analysis, examining all sub-segments of these markets in detail to identify where they believe the greatest opportunities lie. This granular approach helps ensure these assets act as genuine hedges, keeping the investor’s course steady. - Seeking safer harbours during economic slowdowns
In a slowing economy, favouring private equity strategies in resilient sectors or private debt with robust recurring revenue models and strong covenants is prudent. Yet an experienced investor will scrutinise balance sheets, assess the true resilience of cash flows, and identify private debt opportunities that combine compelling yields with controlled default risk.
“The temptation during downturns is to avoid any investments that may appear risky and pursue more conservative strategies explains Faget, “but for the experienced investor, it is an opportunity to identify resilience where others see only risk.” - Capitalising on market stress
While news can influence public markets greatly, they can also influence market sentiment in private markets. A recent example is the large number of investors who have made redemption requests from private credit funds, leading asset managers to use “gating” mechanisms to limit or suspend withdrawals. “While these types of market events are not insignificant, our expertise is to analyse what the consequences can be, and what opportunities remain or can arise from it”, says Faget. “And at the moment, we think private debt markets in the US and in Europe are really different. Our view is still positive for private debt in Europe – as long as the fundamentals stay solid and healthy”.
This subtle approach requires a solid understanding of each private asset class, its sensitivity to interest rates, inflation and growth, as well as its correlation with public markets, and an appreciation of the segmentation within asset classes and across regions. It is about using nuanced knowledge to navigate complexity and sculpt a portfolio that is resilient by design.
Turning the philosophy into a process: when experts come in
Building this long-term multi private assets strategy requires considerable knowledge and effort. That’s when experts like Philippe Faget’s team come in.
“With 30 years of experience investing in private markets, we have navigated the complexities of several market cycles, and we can help investors identifying opportunities in private markets. More than that, our role is fundamentally to manage portfolios, so what we offer is to take on our shoulders all of the operational burden of managing a multi private asset portfolio for investors”.
Indeed, VEGA IS’ philosophy of investing and operational process is clear and established, but intimidating for investors that would lack the resources, be it knowledge, time or budget, to follow it.
It consists in investing thanks to a fund of funds model, and can be broken down to 5 key pillars:
- Selection of the fund managers as expert leads
For VEGA IS’s team, investing in private markets starts with investing in funds managed by other fund managers. Managers bring deep sector expertise, a strong network, and a proven ability to identify, acquire, improve and exit investments. Their track record across economic cycles, the stability of their team, and the alignment of their interests with investors indicate their capacity to deliver resilient performance. Fund managers execute the funds’ mandate and provide crucial operational expertise.
Faget emphasises: “The quality of the managers selected to invest in dictates the operational excellence driving value creation within each private asset. Due diligences here are non-negotiable.” - Strategy alignment with macro conditions
Different private strategies such as venture capital, growth equity, buyouts, debt, infrastructure or real assets thrive under different macro backdrops. Effective adaptive allocation requires understanding which strategies are best positioned for the prevailing environment and adjusting exposures accordingly. - The vintage year effect
Unique to private markets, the vintage year (when the fund begins investing) determines at which point in the cycle capital will be deployed over years. Funds launched just before a downturn may face more challenging conditions, whereas those raised at or near a trough can acquire and sell assets on more favourable terms. Thoughtful vintage diversification helps mitigate cycle risk. - Geographical diversification
Different regions offer differing growth prospects, risk profiles and levels of market maturity. A globally diversified approach can capture growth in emerging markets while leveraging the relative stability of developed markets, reducing dependency on any single region and broadening the investor’s horizon. - Robust liquidity management
As the recent private credit funds events have shown, liquidity is central to investors. Philippe Faget’s team has built multiple private assets investments programmes for clients using evergreen funds, ie open-ended structures that allow for periodic subscriptions and redemptions. “We build our multi private asset solutions insuring our liquidity mechanisms are robust. While gates (redemption limits) are a useful tool, we actually look at ways to build sufficient liquidity for our investors so that we do not have to rely on them. This includes having sufficient liquidity reserves invested in money market funds, and the recycling of distributions into liquid assets if needs be”
This holistic approach, combining adaptive allocation with diligent fund selection and calculated diversification, is central to building a truly resilient multi–private assets portfolio. By creating a core of assets that are inherently less correlated with public markets, investors gain a crucial buffer, contributing to greater stability and predictability at the total portfolio level. A deep understanding of private asset characteristics and fund manager capabilities enables optimised capital deployment.
Achieving enduring resilience
This path demands patience and a willingness to accept that capital may be locked up for several years. It also requires understanding fee structures and operating within a less transparent environment than public markets. Yet these are not prohibitive obstacles; they are the hallmarks of a more deliberate and ultimately more resilient approach to wealth creation.
In an economic environment that increasingly demands stability, “we believe that private assets, combined with adaptive allocation and meticulous selection, offer more than diversification; they offer a philosophy of enduring value”, concludes Philippe Faget.
