In today’s market, modern companies are staying private for much longer than they used to. The median age for tech companies going public in 2000 was 4-5 years compared with 12 years in 2018. The returns generated by these companies during their growth phase are only achievable by accessing the private share market. As an investor, this makes it essential that you gain an earlier entry point to these companies by investing in private company shares.
Institutions worldwide are increasingly turning their attention to the private markets. Every major category of institutional investor sees themselves as being underallocated to private markets. In a world starved for yield, where traditional assets are forecasted to provide muted returns over the next 5-10 years, private companies can provide the yield pickup needed to reach your investing goals.
Private markets are also not subject to many of the difficulties associated with investing in public equity markets. Flash crashes, quarterly reporting moves, indexing and ETFs- these are facets of the public markets which directly affect investors, yet have little to do with the underlying performance of a given company. Private markets are insulated from these concerns.
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