As 2025 begins, we gathered insights from our experts as they consider the challenges and opportunities that could define the new year. They are optimistic about the opportunities of the coming year while considering the areas that may be most challenging to clients in 2025 and beyond. Read on for sector-specific trends including private equity, renewable energy, and regulatory shifts. Read Part One for a focus on private credit and infrastructure from a macro-regional perspective.
Private equity fundraising to improve—and the big grow bigger
Marshall Saffer, managing director, Fund Services said, “In 2025, fundraising is likely to improve, with growing interest from non-institutional investors who have had less exposure to private equity. In the private credit sector, the big will keep getting bigger and demand will continue to increase as traditional banks grow more risk averse.” He added that according to Morningstar, private credit could tap into as much as $3 trillion in assets moving off bank balance sheets in the next five years, including residential mortgages, higher-risk commercial real estate, project finance, and asset-backed finance like auto loans, aircraft leasing, and student loans.[1]
Marshall noted that as the size of transactions grows, so have the lenders, and this trend is likely to continue as well. For example, Blackrock’s agreement for the acquisition of HPS Investment Partners will create an integrated private credit franchise with approximately $220 billion in client assets.[2]
“Secondaries are likely to play a growing role in private capital as portfolios face liquidity constraints after broad adoption by both limited partners and general partners in 2024. Preqin noted that the structural growth of the secondaries market is expected to exceed the primary market for a variety of factors, including private wealth,” he added.[3]
European ABS may get possible boost from the renewables market
Commercial Director Dennis Stone noted that although 2024 has been a record year in terms of new issuance across structured finance post global financial crisis, the European asset backed securities market will likely be flat or on par with 2024. “This will predominantly be driven by inflation and the need for governments to reduce interest rates, coupled with geopolitical uncertainly.”
“However, growth could come from the renewables market, with the EU Green Deal and the success of Golden Ray, the first residential European solar ABS deal in 2024 as drivers. Another development to watch is data centers, to see how the momentum carries into 2025 and where this potential new asset class lands. There are indications that the trend will continue, as in 2024 the first European data center securitization was issued, the U.K. government classified data centers as Critical National Infrastructure, and Europe’s Digital Operational Resilience Act becomes effective January 2025.”
Data centers are now the backbone of the digital economy, and project finance is facilitating their rapid expansion. With the surge in energy demand from AI and cloud computing, structuring investments around future cash flows while integrating sustainable practices is key to scaling these facilities responsibly and profitably.
Read more in Dennis Stone’s recent post The Moon Landing, the Rise of Data Centers, and a Cloud of Carbon
Dennis noted that how to power data centers is a challenge to be considered from multiple standpoints, including environmental impact. The increase in data centers is expected to produce 2.5 billion metric tons of CO2-equivalent emissions globally through the end of the decade, which is likely to accelerate investments in decarbonization efforts, according to Morgan Stanley research[4]. “With the development of new sustainable energy sources potentially taking years to complete, this sharp and sudden rise will only increase short term carbon emissions, driving higher demand for carbon credits,” he added.
CSC experts examine the growing demand for carbon certification in our article, What Factors are Driving Activity in the Carbon Credit Marketplace?
Alternative investments to support growth in APAC
CSC’s Executive Director, Head of Fund Solutions North Asia, Mandy Lam thinks in an era of increasing data transparency, markets and investors are gaining fresh perspectives, reshaping perceptions about public versus private investments.
She said, “Private capital is crucial for building next-generation infrastructure, powering data and AI innovations, advancing responsible and sustainable investing (ESG), and enabling energy transitions. These projects demand long-term financing, and private investment is rising to meet this need—especially in the Asia-Pacific region.” Mandy added that as one of the world’s fastest-growing economic hubs, APAC benefits from a unique blend of positive factors: rapid population growth, expanding infrastructure needs, evolving asset management models, a strong savings culture, and substantial intergenerational wealth transfers. Together, these elements create immense opportunities for growth.
Alternative private capital investment funds, whether equity- or debt-based, can be a secure option when well-managed and governed. Success depends not only on adhering to regulations but also on the private capital manager’s ability to demonstrate effective controls and governance. This includes robust mechanisms across investment, legal, tax, audit, and operational frameworks, supported by clear execution, monitoring, and oversight.
Automation and AI
Regional Managing Director, APAC, Agnes Chen considered some of the larger forces that may shape the global markets. “In 2025, the funds and capital markets landscape will be defined by a growing interest in ESG integration, rapid advancements in automation technology, and intensified efforts to review or implement regulatory frameworks for AI adoption.”
She said that as market volatility persists, fund managers will face mounting expectations for transparency and reporting. Navigating intricate cross-border regulations will increasingly become standard practice, particularly in highly sophisticated financial jurisdictions.
Early adopters of fintech likely to reap benefits
2024 was a challenging year for the global fintech market due to geopolitical uncertainty and high interest rates, according to a recent KPMG report.[5] While global investment dropped, deal volumes increased in the Americas and Asia-Pacific region in the first half of 2024, bringing optimism about the sector’s future. As this dynamic market continues to evolve, firms that have the knowledge to leverage technology will move ahead of their competition and deliver better results to their clients.
Our EMEA Head of Products and Markets for Capital Markets, Mike Hellmuth said, “I expect the early adopters of fintech solutions to benefit in 2025 as the gap in service quality and capability between those embracing cutting-edge technology and those using outdated platforms becomes increasingly apparent.”
Regulatory demands lead to a focus on data
“In 2025 the alternative investment market in the EU will be shaped by heightened regulatory demands and compliance obligations,” says Johannes Höring, head of AIFM. Fund management companies and AIFMs must navigate a complex web of compliance frameworks, including EU directives, ESMA guidelines, SEC requirements, DORA regulations, ESG standards, and rigorous audit demands. Meeting these obligations can mean nearly seven consecutive months dedicated to reporting to national competent authorities (NCAs), underscoring the need for meticulous planning and resource allocation.
Johannes added “quality data will emerge as a critical focus area, as investment decisions and compliance reporting increasingly rely on accurate, timely, and transparent information. At the same time, the growing threat of cybersecurity risks will demand robust strategies to safeguard sensitive data and maintain investor trust.”
The ability to balance operational efficiency with regulatory compliance will define success in this evolving and demanding market.
Looking for more insights into how 2025 will unfold? If you missed it, read Part One of our 2025 Perspectives article for a focus on private credit and infrastructure from a macro-regional perspective.
How CSC can support your success
For more information about how CSC can help you take advantage of opportunities in the coming year visit our fund solutions and capital markets pages. We’re a one-stop-shop—the world’s leading provider of global business administration and compliance solutions, specialized administration services to alternative asset managers across a range of fund strategies, transactions involving capital markets participants in both public and private markets, domain name system management and digital brand and fraud protection, and corporate tax software solutions.
CSC has office locations and capabilities in more than 140 jurisdictions across Europe, the Americas, Asia Pacific, and the Middle East. We are a global company capable of doing business wherever our clients are—and we accomplish that by employing experts in every business we serve. We are the business behind business®. Learn more at cscglobal.com.
This document is provided by CSC for information purposes only and does not constitute an offer, invitation or inducement to contract. The information herein does not constitute legal, tax, regulatory, accounting or other professional advice and therefore one should seek appropriate professional advice before considering a transaction as described in this document. No liability is accepted whatsoever for any direct or consequential loss arising from the use of this document.
