From View From The Top, 12 November 2025
Back to Equity — The Next Cycle of Conviction Capital
For most of the last five years, yield was the story. Credit looked clever. Equity looked exposed.
In a world of rising rates and falling confidence, investors wanted collateral, coupon, and downside protection.
Private credit became the new equity story — structured, defensive, and measurable. But the pendulum always swings.
As inflation cools, liquidity returns, and generational wealth starts to reposition, the conversation is quietly shifting. We’re seeing the early signs of a move back to equity — not leverage.
This isn’t about risk appetite. It’s about conviction.
From Credit to Creation
During the 2020–2024 cycle, family offices and private allocators rotated heavily into credit. It made sense:
- You earned equity-like returns with lower volatility.
- You sat senior to risk.
- You avoided messy operational exposure.
- You earned equity-like returns with lower volatility.
- You sat senior to risk.
- You avoided messy operational exposure.
But in 2025, the trade is crowded. Margins are thin, underwriting risk is up, and many private lenders are discovering that their collateral isn’t as liquid as their models implied.
Meanwhile, the next generation of wealth owners — the ones inheriting trillions over the next decade — think differently. They didn’t live through 2008. They aren’t scarred by leverage. They think in ownership, transparency, and creation.
The next cycle won’t be financed into existence. It will be built into existence.
Where Equity Is Re-Emerging
Across Europe, we’re seeing early-stage capital quietly pivot back toward ownership.
🔹 Residential & Living: Institutional appetite has thinned, but private equity and family offices are stepping in to fund mid-market rental, co-living, and wellness-led housing — sectors still fundamentally undersupplied.
🔹 Special Situations Equity: With cost inflation stabilising, recapitalising stalled or distressed projects below replacement cost now looks attractive. This is smart, opportunistic equity, not speculative capital.
🔹 Operating Platforms: Next-gen investors are blending real estate and data — building lean operating platforms that drive yield through management and service, not leverage.
Equity is returning to places where people can add value, not just collect spread.
Regional Flows
The geography of conviction is shifting too:
- UK: distress turning into equity entry points as lenders restructure or sell loans below par.
- Southern Spain & Portugal: development pipelines paused mid-cycle — now recapitalised by patient family capital at reset valuations.
- CEE markets: first-generation developers seeking western partners to convert land banks into scalable rental platforms.
- UK: distress turning into equity entry points as lenders restructure or sell loans below par.
- Southern Spain & Portugal: development pipelines paused mid-cycle — now recapitalised by patient family capital at reset valuations.
- CEE markets: first-generation developers seeking western partners to convert land banks into scalable rental platforms.
The opportunity isn’t in finding yield — it’s in re-underwriting value.
Capital on the Move — From Coupon to Conviction
For opportunistic investors, the question isn’t when to move, but how to pivot.
Credit was the defensive posture of a fearful cycle. Equity is the language of builders.
The next decade will belong to those who can take a balance-sheet view — patient, flexible, and operationally intelligent.
The generation inheriting capital doesn’t just want to preserve wealth. They want to build again.
And that’s where the real returns will come from.
The Hard Landing Journal
The hardest part of any cycle isn’t the correction — it’s the recovery.
When markets stop falling but haven’t yet started rising, most people freeze. How do you reposition yourself, how do you last the next turn of the corner?
That’s when conviction comes into play. Someone once told me, “never leave before the miracle happens”. All corrections end, and it’s when things look tough you need to dig in and see what other don’t. You need the faith that what your conviction tells you is true no matter what the crowds are doing. Crowds are never correct.
Stepping back into equity now isn’t bravado — it’s timing, patience, and perspective.
Because the only thing riskier than ownership… is sitting out the rebuild.
