The liquidity crunch is brutal. It’s also creating the best opportunities in years

This interview was filmed 29th April, 2026.

The private equity industry had a long run of wins. Low rates, expanding multiples, and cheap debt did much of the heavy lifting, often delivering returns beyond those of listed markets. Historically, it’s been a massive growth engine, but that era looks to be over.

The environment private equity is operating in now is one of higher rates, tighter liquidity, and far less tolerance for mistakes. And it's forcing a change in how returns are actually generated. The playbook is being rewritten.

For this instalment of Livewire's Growth Series, I sat down with Gabriel Ng, Managing Director at Neuberger Private Markets, a firm with more than 30 years of investing across private markets globally.

Ng tells me there’s a phrase going around in private equity circles that captures this shift in the returns equation - "12 is the new five".  I confess (here) that I have never heard of it, but luckily Ng explains.

"A much higher rate of earnings growth — typically in that low double digits CAGR — is required to generate a similar PE-style return compared to a mid-single digit earnings CAGR previously."

To put it simply, a 5% annual earnings growth rate once did the job. Today, managers need to be closer to 12% to achieve the same outcome.

That’s a tough environment to work in, but there are always ways to adapt and turn challenges into opportunities.  

In this conversation, Ng unpacks where genuine growth opportunities sit today, what AI is actually delivering for private businesses, and how the liquidity crunch has created some openings that didn't exist a few years ago.

Watch the interview above for all of the insights or read the summary below.

Where the growth is

Ng's team is backing three broad themes: AI (spanning both foundational models and data infrastructure, as well as enablement across services, critical components, data centres, and productivity tools), defence, and space technology. But he's not abandoning the less fashionable parts of the market either, with the team continuing to invest in business services, healthcare, industrials, and financial services.

On the company level, good growth has a specific definition.

"We see good growth as growth that's driven by market leadership, differentiated products and services, strong unit economics, and importantly, sustainable long-term growth - not just in terms of top line, but also in terms of profit generation."

The return equation has changed

This is the part that matters most for investors evaluating private equity allocations right now. The old model - buy a business, load it with debt, wait for multiples to expand - is largely broken. 

In Ng's words - "In a higher interest rate and more volatile environment, the dependence on financial leverage and multiple expansion is certainly reduced. The majority of returns that we underwrite today are based on fundamental growth in top-line revenue, as well as earnings."

That places a higher burden on managers to generate earnings growth through operational means. 

It's why Ng believes the quality of the private equity manager matters more now than it did when the tide was rising for everyone. Ng's view is that managers need genuine in-house capability - across HR, procurement, technology, and M&A - to move the needle at the portfolio company level. 

Bolt-on acquisitions are part of that toolkit, too. Ng describes an approach in which managers buy "smaller competitors at a lower entry valuation multiple than the original valuation multiple that they have paid for the business" to scale the underlying company over the life of the investment.

With so much capital flowing into AI, the important question is where durable value is actually being created. 

Ng sees genuine use cases across automation, decision-making, employee productivity, cybersecurity, and product customisation, but says the measure of success is straightforward -

"AI implementation should drive competitive advantages that lead to durable top line growth as well as margin improvement."

On execution, Ng says success requires "a systematic and structured approach, starting with leadership buy-in at the top, recruiting the right talents, and ultimately the implementation and actual execution of these initiatives."

The liquidity problem...and what's opening up inside it

Exit timelines have stretched, and distributions relative to NAV have been running below their long-term average for a few years - a real constraint for investors who need cash flows from their private equity allocation.

But Ng sees two opportunities opening up as a result. The first is continuation funds, where managers hold onto top-performing assets rather than sell into a weak exit environment, giving existing investors the option to take liquidity or roll over. As Ng notes: 

"Whilst we're seeing a pickup in such transactions, we're also highly selective - GP alignment, transaction structure and asset quality are all key considerations we need to get comfortable with before leaning into such continuation fund deals."

The second is mid-life transactions. Ng explains: "Our capital goes into high-quality private equity-backed companies to enable a few things - oftentimes partial equity recaps or to fund transformative event transactions."

Both sit within Neuberger's evergreen co-investment and GP-led secondaries approach, which focuses on underwriting individual assets rather than buying diversified LP portfolios at a discount.

Where private equity fits

Public markets have delivered strong returns in recent years, but have concentrated in a narrow group of stocks. Ng's view is that the private markets opportunity set is expanding, as more companies are choosing to stay private for longer.

"We do believe that in the private market space, more companies are opting to stay private for longer, and hence we see the addressable market for private equity continuing to increase."

Over shorter horizons, private equity has struggled to keep pace with listed markets. Over longer periods - 10, 15, 20 years - the asset class has historically outperformed. Ng expects that to hold, but with an important caveat.

"The dispersion of returns between top quartile as well as the bottom quartile private equity funds will likely widen even further. Therefore, manager selection, cross-cycle investment experience and a large deal funnel — these are all aspects which we believe positions Neuberger well to continue to navigate private markets."

The allocation decision is one thing. The manager decision is another. And in this environment, Ng says, it's the one that matters more.

Managed Fund

Neuberger Berman Global Private Equity Access Fund (AUD)

Alternative Assets

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