This week in charts
Market-cap weighted performance by region
Global valuation range by country
Valuations and expected earnings growth
European equity fund flows
Ownership of European equities
Historical GDP growth cycles
U.S. tech sector credit spreads
Small- vs. large-cap stocks – 10-year returns
AI hyperscalers – capex % of operating cash flow
Hyperscalers vs. telecom companies – capex
S&P 500 Index market cap concentration
S&P Information Technology Index vs. S&P 500 Index performance
New technology indexes and stock bubbles
US public pension funds pare allocations to private credit
A Financial Times analysis of public records shows 70 major US public pension funds reported an 18 per cent decline in allocation to private credit in the first six months of 2025 from a year earlier. Public pensions have been a key source of capital for the sector, which posted an overall 40 per cent drop in North American fundraising in the first half of the year, according to financial data provider Preqin.
State and city pension plans told the FT they have tightened scrutiny of new private credit managers and paused allocations since the start of the year.
The pullback highlights institutional investors’ growing unease with a boom that emerged as private investment funds became key lenders to small- and mid-market businesses.
Private credit has flourished in recent years as it has filled the void left by banks that pulled back from small- and medium-sized business lending amid tougher capital rules and strains at regional lenders such as Silicon Valley Bank.
The asset class has drawn investors by delivering high single- to double-digit returns with limited risks. Total assets under management at US private credit vehicles more than doubled to $1.4tn in 2024 from five years ago, according to Federal Reserve estimates.
Until now, public pension funds played a pivotal role in fuelling the boom. A survey of 438 public pension plans by the National Conference on Public Employee Retirement Systems in November last year found their average allocation to private debt had surged to 4.1 per cent from 0.7 per cent three years ago.
But as the private credit binge has intensified, spreading from institutions to retail investors, pension funds are beginning to retrench.
The $44bn Iowa Public Employees’ Retirement System paused its $550mn annual private credit allocation after committing $100mn in the first five months of this year, according to public records.
At a June board meeting, chief investment officer Sriram Lakshminarayanan said the fund would resume making new private credit commitments in the following month but set a “pretty high” bar for future investments.
The $2.4bn Cincinnati Retirement System has also shelved plans to hire a new private credit manager. “I’d rather wait and see what happens over the next six months,” said chief investment officer Jon Salstrom.
Such caution has led many funds to allocate less to private credit than they previously planned. An S&P Global Market Intelligence study of more than 70 plans found 66 per cent fell short of their targets in June, up from 63 per cent in January.
Some managers cite policy uncertainty as a factor, as many plans struggled to gauge the impact of President Trump’s tariff war and tax bill on investment outcomes.
Pension plans are also worried the surge in private credit funds may weaken lending standards and increase default risks.
Yup Kim, CIO of the $46bn Texas Municipal Retirement System, said the retail rush was leading to an abundant supply of capital which can lead to “looser covenants, structural protections and underwriting standards” — trends that ultimately affect pensions as well.
The problem is exacerbated by higher-for-longer interest rates and an uncertain US economic outlook that may “inevitably” cause private credit defaults to “tick up”, said Ross Alexander, a senior portfolio manager at the $85bn Alaska Permanent Fund Corporation.
Alexander said Alaska was looking to work with private credit managers with experience in asset recovery to make sure the fund’s returns are “better protected”.
Despite the concerns, some pension plans are still keen to expand their private credit exposure in the belief that careful planning may generate excess return without undue risk.
This weeks fun find
Rivals Rub Shoulders in the World of Competitive Massage
The moment when a massage begins, for both practitioner and receiver, has a sacred quality. The initial touch marks the transition from regular life—chitchat, logistics, social armor—to the otherworldly realm of the massage, in which mind and body are uniquely harmonized, and some kind of euphoria is achieved. It’s also a transfer of power, in which the receiver willingly becomes vulnerable to the practitioner. If the first touch feels off, you won’t relax. If you don’t relax, you won’t have a good massage.
The eighth annual World Championship in Massage was under way in a modernist, glass-and-concrete building owned by University College Copenhagen. For a weekend, more than two hundred and sixty competitors from fifty-eight countries would face off in nine categories, including Swedish, Thai, chair, and Eastern- and Western-freestyle massage. At the opening ceremony, staged in a lecture hall with tiered seating, the mood had been set by a music video for “vikings (Hey Ho),” by Hedegaard, a Danish d.j. The song starts off eerie and atmospheric, then morphs into pounding, monster-voiced E.D.M., the video showing a lone Viking sailing beneath a crow-filled sky. The massage therapists sang—“hey . . . ho . . . hey . . . ho”—and danced, waving their arms. “warriors!” the singer bellowed, invoking Thor, bravery, and Valhalla. “to victory!” The massage therapists went wild. To my left, people brandished flags from Argentina, Cuba, Kazakhstan, and Ukraine. To my right, a man in a tracksuit looked befuddled.
The championship has two stages. In the preliminary rounds, competitors massage fellow massage therapists—“It basically functions as a giant massage trade,” one told me—in classrooms full of numbered stations, under the watchful eye of judges holding clipboards. Judges grade on an eighty-five-point scale, assessing technique, innovation, client communication, ergonomics, and flow. Winners then proceed to the championship round, in which they massage the judges. As at an élite dog show, starkly different categories have competitions within themselves, then against one another; at the end, a chair massage might beat a facial or a Thai massage, like a Yorkie besting a Weimaraner.
The championship has brought to the field what some felt it lacked: inspiration, dramatic stakes, and, perhaps, a mild rumspringa quality. (It’s very pleasant to visit Copenhagen in June.) There’s a mighty Thai presence at the event—more than two dozen competitors, with a strong group spirit—and several therapists told me that they’d gone to Thailand to train after being energized by the event in Copenhagen. Others had learned specific new techniques. Judy Drown, from northern Idaho, said that, before coming to the event in 2024, her routine had been stuck in a rut: “I started with the head, face down, I worked for a half hour, we flipped over, I worked head to toe for another half hour.” The world championship changed that. “One of the finalists basically picked their client up halfway and spun them head-for-feet halfway around on the table,” she said. “They didn’t flip them supine to prone—they flipped them head-for-feet, which got a big ‘whoo’ out of the crowd. I was, like, What?! It was really quick and smooth.” Drown is now striving to be able to flip sleeping clients without waking them up.
To outsiders, including noncompetitive massage practitioners, the whole thing can seem nuts. In Manhattan, at a low-frills spa I’ve been going to for years—everybody they hire has a good touch—one of the owners was incredulous. “I mean, imagine being a cardiothoracic surgeon and having a cardiothoracic-surgery competition,” he said. Nathan Nordstrom, a past president of the American Massage Therapy Association, had once been wary, too. “The A.M.T.A. is very focussed on the acceptance of massage therapy as a clinical practice,” he told me, and a massage championship might not help. But his friend and respected colleague Ryan Hoyme, the author of “The Complete Guide to Modern Massage” and the proprietor of MassageNerd.com, was going. “I reached out to him and I said, ‘Really, is this a joke?’ ” Nordstrom recalled. “And he’s, like, ‘No, it’s really competitive.’ He got me excited to know that you can actually create a standard and an acceptance of a technique worldwide.” Nordstrom, who has now medalled in one competition, and has judged events in Detroit, Kentucky, Copenhagen, and elsewhere, has a passion for standards. “I’ve been told I’m the Simon Cowell of massage judging,” he said.
