Operational Strength Amid Valuation Declines

Despite recent declines in asset valuations primarily driven by high interest rates and rising cap rates, the underlying assets in the market continue to operate strongly. This operational strength allows investors to capitalize on recapitalization opportunities by providing capital to general partners (GPs) to help pay down debt. By stepping in during these times, investors can assist GPs in stabilizing their portfolios, which is critical when financing becomes constrained. This kind of support highlights the resilience of certain market sectors despite external pressures, positioning them for future recovery.