StepStone tells insurers real estate is at a bottom
The private markets firm's 2H26 house view is a pitch to redeploy capital into dislocation, and the cost of being early is the test.
StepStone Group’s 2H26 house view tells institutional allocators that real estate pricing is near the bottom of the cycle and the resulting dislocation makes a compelling entry point for capital. The pitch carries two distinct arguments, one durable and one tied to today’s price.
Jeff Giller, partner and head of real estate, and Margaret McKnight, partner and head of portfolio solutions, set out the view on the RPM podcast with co-host Maribel Yoo. They describe "dislocation and pressure to sell certain assets" amid high macro uncertainty even as they remain cautiously optimistic on property fundamentals.
For insurers, StepStone repeats the long-standing case that real estate has historically protected portfolios from inflationary shocks and its low correlation with equities can deliver meaningful diversification. Those arguments do not depend on buying at this exact moment; the dislocation is a current condition and the only part of the pitch that is time-sensitive.
The episode is a reminder that as asset managers take on more insurance capital, their house views effectively steer general-account allocations. StepStone’s call is emphatic about price and careful about fundamentals, a fair split given the macro uncertainty it cites.
The bottom call doubles as a fundraising message; a private markets firm profits when clients commit. That does not make it wrong. But an insurance general account should hold the two ideas separately: real estate as a diversifier is a durable case, and real estate at today’s pricing is a sharper one. If the house view is right, the next few quarters are the window; if it is early, the same assets are likely to be cheaper next year—a year of drag on a portfolio that could have waited.
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