Executives from the private equity and private credit sectors gathered in Berlin this week for SuperReturn, Europe’s premier conference for the $11 trillion private markets industry, seeking to counter growing skepticism surrounding their asset classes. Industry leaders emphasized that much of the negative perception about private capital is misplaced, attributing investor withdrawal trends and critical media coverage to misjudgments rather than underlying financial weakness.

Speaking to an audience exceeding 6,000 attendees, Arcmont Asset Management founder and CEO Anthony Fobel highlighted a disconnect between the negative headlines and actual portfolio performance. He described the resilience of private credit portfolios as “almost directly the opposite” of media narratives, asserting that institutional support for the asset class remains strong despite recent challenges.

Private credit, which has expanded rapidly since the global financial crisis to reach $1.8 trillion, is now facing heightened scrutiny, particularly from individual investors who have fueled much of its growth. Several major firms, including Apollo Global Management Inc., Blackstone Inc., Blue Owl Capital Inc., and Cliffwater LLC, have implemented gates or restrictions on redemptions, measures that have drawn criticism but are defended by executives as necessary components of semi-liquid investment structures. Apollo co-president Scott Kleinman described these caps as “a feature, not a bug,” underscoring their role in managing liquidity risks.

Ares Management Corp. co-president Blair Jacobson and Monroe Capital Corp. CEO Ted Koenig attributed withdrawal pressures largely to retail investor behavior, with Koenig likening investors to fish that move in schools, moving in and out of investments simultaneously. This phenomenon has extended beyond private credit to some private equity funds, notably so-called evergreen vehicles managed by Partners Group Holdings AG. Partners Group chairman Steffen Meister acknowledged that gating has become “not unusual these days” but noted the firm’s portfolio remains predominantly institutional.

The tensions evident at SuperReturn underscored broader challenges within an industry grappling with shifting investor dynamics and a more cautious liquidity environment. Alongside concerns about investor redemptions, discourse highlighted the impact of artificial intelligence on portfolio companies, with some assets expected to thrive while others face increased risk. Mustafa Siddiqui, CEO of SQ Capital, described the private equity landscape as entering “a new era of haves and have-nots,” noting that the industry can no longer rely on the tailwinds of negative interest rates and rising valuation multiples that previously buoyed returns.

Debates among panelists revealed differing perspectives on risk allocation between private credit and private equity firms. Private credit managers stressed that buyout funds absorb initial losses on certain software investments, while private equity representatives countered that their firms’ return profiles—with uncapped upside potential—could offset individual setbacks. However, this division may inadvertently fuel investor concerns, potentially encouraging affluent retail investors to reconsider their exposure across the broader private markets ecosystem.

The conference, held amid street protests outside the venue, reflected both the financial community’s determination to defend its narrative and the real-world pressures reshaping private capital’s future. As the industry confronts evolving market conditions and growing demand for liquidity, the balance between protecting investor interests and managing perception remains a central challenge.