Public markets give a running commentary on the biggest players in private markets. Over the last year, this has gone from good to bad to worse. The sector’s long-term growth prospects may be more-or-less intact, but the next few years probably won’t feel that way.

Investors are prone to bouts of exuberance and gloom about private-market investment firms. Shares in Blackstone Inc., KKR & Co., EQT AB and peers fell in late 2021 as investors anticipated the end of the low interest-rate era, robbing the industry of cheap financial fuel. They regained their mojo in response to new fee-garnering opportunities from raising private credit funds — which lend directly to companies — and tapping wealthy retail investors (often in tandem). Donald Trump’s 2024 presidential election victory was seen as good for dealmaking and provided a further leg up. Blackstone president Jon Gray said last year the “deal dam is breaking.”

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