Headlines keep telling us valuations are “normalizing.”

Headlines keep telling us valuations are “normalizing.”

Translation: prices are supposed to be settling back to fair levels after years of hype.

Normalization is a headline. The ledgers don’t agree.

Funds are marking up slower-growth assets at higher multiples than outperformers (PitchBook). The logic is inverted — the laggards are valued richer than the stars.

Investors aren’t convinced. Surveys show LPs split down the middle: some think valuations are too high, others too low. In other words, nobody trusts the NAVs (IPEV).

Liquidity isn’t confirming the story either. If values were truly “normal,” you’d see exits. Instead, distributions are stuck at decade lows (MSCI).

And regulators have noticed. The SEC and FCA have both raised concerns about valuation practices in private markets. You don’t “normalize” under investigation.

“Normalization” is the word you use when you can’t say markdown.

It’s not a reset. It’s financial theatre.

When valuations “normalize” without exits, you’re not watching balance.

You’re watching suspension of disbelief.