From an uncertainty standpoint, nothing appeared to change in the second quarter. Geopolitical tensions remained the dominant story, resulting in a steady stream of headlines that alternated between escalation and de-escalation. The economic and financial implications seemed straightforward enough. Higher oil prices would fuel inflation, higher inflation would place upward pressure on interest rates, and tighter financial conditions would weigh on economic growth. Investors spent the quarter navigating some combination of military conflict, inflation and interest rate concerns, trade disputes, and technological disruption.
And yet again (or at least for now), the list of concerns proved far more durable than the concerns themselves. Public equity markets rebounded sharply from their March lows, delivering some of the strongest quarterly gains since 2020. While the rally was initially concentrated among AI-hyperscalers and large-cap growth companies, participation broadened meaningfully as the quarter progressed. While the backdrop continues to feel precarious, public markets demonstrate a remarkable ability to discount tomorrow's possibilities while ignoring today's uncertainties.
So how did we do against this backdrop?
We are pleased with the second-quarter performance across all five mandates. Our public equity exposure benefited from the broader market recovery off the March lows, while all our private asset classes posted positive performance.
Whether the current public market optimism continues remains to be seen. The path forward appears no less complex, and the questions facing investors are likely to continue to shift. Rather than attempting to predict the next headline, we continue to construct portfolios that can withstand a variety of outcomes.
We turn 25 years old in 2026, and we have been investing long enough to know that extended periods of uncertainty are recurring features of financial markets. Our focus remains on making thoughtful long-term capital allocation decisions. In the second quarter, this resulted in a significant amount of new investment activity across public and private asset classes.
We continued to build out our private real estate exposure through a fund targeting investments in student and senior housing, medical and healthcare office space, and light industrial assets. We believe this investment will complement and further diversify our existing real estate portfolio while broadening our exposure across sectors with favorable demographic and economic trends.
We also increased our global infrastructure exposure, reflecting our growing conviction in HALO assets — Heavy Assets, Low Obsolescence. When technological winners change every few years, we are attracted to assets with lasting relevance. Whether transporting energy, transmitting electricity, connecting digital networks, or supporting the growing demands of artificial intelligence, these essential assets combine durable cash flows, high barriers to entry, and a lower risk of technological disruption than many traditional growth investments.
We made a further allocation to a private equity strategy focused on a portfolio of leading technology companies acquired in the private secondary markets at material discounts to current valuations. As many innovative businesses remain private for longer, this type of investment provides access to high-quality companies that are often unavailable to traditional investors. The discounted purchase prices offer both an attractive entry point and an additional margin of safety.
We also increased our allocations to public equity markets in the second quarter, leaning on an actively managed, index-based strategy that complements our active managers and provides broad-based market exposure.
As we approach $7 billion in assets under management, we remain grateful for the trust you have placed in our firm. We believe the breadth of opportunities available to us reflects the strength of our platform and the relationships we have built across public and private markets.
Our opportunity set remains robust, and our pipeline remains active. As we move into the third quarter, we are actively engaged in diligence on opportunities across infrastructure, private mortgages, private debt, and private equity. We will also take advantage of market volatility to selectively increase exposure to public equities and fixed income as opportunities emerge.
We look forward to sharing more ideas and insights with you in the months ahead.
To find out more about Newport’s unique investment approach and discuss how our strategies align with your goals for 2026 and beyond, get in touch.
Kyle Smith, MBA, CFA® is a Managing Director & Portfolio Manager and a member of Newport Private Wealth’s Investment Committee.