J.P. Morgan Asset Management released its “2024 Alternatives Outlook” last month, and the New York-based firm highlighted a dislocation taking place in the markets after private market activity saw a significant slowdown last year.

Specifically, the firm anticipates opportunities with secondary transactions in private equity, private credit and real estate, according to Anton Pil, the firm’s global head of alternatives. There are also opportunities in the commercial real estate market.

“Some of the values of buildings around the United States in particular are beginning to look attractive, and we’re close to bottoming out on those valuations,” he said. “You’re probably going to want to be a part of that.”

The commercial real estate market is heating up as companies and businesses return to the office and need space. J.P. Morgan itself just signed a large lease for its building in New York City, and Pil said more companies have been pushing their employees to return to the office, thus increasing demand for high-quality space.

“The number of people going into offices continues to rise every day, and if we’re going to see pressure on the unemployment rate in the United States, I think you’re going to continue to see office attendance starting to rise,” he said. Although the notion is still that no one is going into an office, he said that contrasts greatly with the facts the firm has seen on the ground in the last six months.

While there might be opportunities there, Pil predicted that those dislocations will take place in the first half of the year and normalize by year’s end.

Other investment opportunities in the coming year stem from two major areas: AI and life sciences. As for the former, J.P. Morgan is looking to invest in those companies that can successfully incorporate AI into their day-to-day operations.

The technology “will dramatically improve productivity over the next three to five years, and the companies that we can find that can build tools around that [and incorporate them into business] I think are going to do extraordinarily well,” he said.

Life sciences has the potential for tremendous growth, and J.P Morgan sees significant opportunities in it, Pil said. There are several medical innovations pending, including obesity drugs, drugs generated by biological mechanisms, and the targeted delivery of medicine by dedicated antibodies, he said.

“The space of life sciences is changing so rapidly you want to be part of it, and I think that the next five to 10 years we are super excited about that space as well,” he said.

As alternative investments continue to grow in popularity, he said one specific investment still holds tremendous opportunity: hedge funds. These function well during periods of volatility, he added, and with many unsure about whether the Fed will lower rates, raise them again or do nothing, hedge funds are poised to have a great year.

“That sort of flip-flop back-and-forth based on every piece of data that comes out usually benefits at least the relative value hedge fund players, and we’re going to continue to see that be a series of strategies that I think are going to continue to do reasonably well for 2024 as well,” Pil said.