Private Markets

“Our team has the view that there is still a lot of value to be had over the long term in private markets. Maybe not every private market. We want to be more discerning there. But we have the ability, and we have been growing that portfolio Substantially over t…”

“We do discuss and say that privates are not essential. Meaning we should choose to have them because of the return we believe they will deliver over time. And that return needs to be in excess of what's offered in public markets.”

“I think public markets are Substantially more difficult to hold than private markets.”

“The main reason of capital being Available to you as a private company. I think that stays. And so this balance will persist.”

“AI's vast consumption of cash is beyond even the capability of private markets, however.”

“And so if you're an investor and you're looking for diversification, there's no place to get it other than private markets.”

“We, we're gonna see the same thing happen with industrial companies. Lots of industrial companies are just gonna decide to stay private longer for all the reasons we know.”

“I, you know, so I think there'll be some correction in private markets, but it's not going to be 2008 where you were destabilizing the system because it's not owned by banks at 30 to one leverage or these days the leverage is lower, but plenty were 20 to 30 to…”

“There is no argument for overstaying your welcome in the private markets at this point.”

“We believe privates belong in everyone's portfolio.”

“Tokenization will be the primary vehicle for ex-US investment until we get regulatory clarity and you'll see tokenization of privates seep into the US as well.”

“There is more bad behavior in private markets than I think people realize. FTX, it's very public, but these companies, they're not filing always audited financials. They don't have the controls. Particularly when something starts to go bad, there's a lot of ba…”

“So there's fewer people competing, but they're all doing the same thing. Whereas the public market, there's tons of people competing, but they're all playing a different sport.”

“At the top, call it 20, rough just as 20 companies in the private markets. 18 of those would probably be public today, a decade ago.”

“And if you look at the TPA adherence, they tend to have a bigger exposure to private markets.”

“This mechanics of maybe it's better to be in the private market because nobody will look at how I'm defining revenue, or what's gross margins, or what contribution margin, I think it doesn't create a good business.”

“The public markets ceded another three to five years of growth to the private markets, which meant market expansion for venture, And market contraction for small cap publics.”

“Over time, as you see the world of wealth, utilize the private markets and go from low single digit utilization to mid single digit and high single digits. It's going to be a case-by-case conversation with a financial advisor and a family.”

“The biggest impact of that over the next couple of years is that when private markets unlock for liquidity, the first wave of that money from the institutional market is going to go back to the public markets. It's not going to get recycled in the private mark…”

“The private markets have grown 10 X over 10 years, right? It's over five trillion dollars of market cap now in our market.”

“And if you look at what's happening in the private versus public markets now, the size of the winners from a new tech wave, that's going to happen in the private markets.”

“The output of that is in the last short period of time, we've seen six public processes for sales of real estate companies to the private market, all of which seem to be happening at Large premiums”

“The bigger risks revolve around this idea of management of expectations, ensuring that why investors are embracing this match up with what can be delivered. It's awareness, education, and expectations management where it has the greatest surface area for risk.”

“The key sense you're missing is you can't execute a trading strategy if they're private, because when things go wrong, the liquidity won't be, when things go right, you can trade on your way up, but it would be, it'll be a lot harder to get out of one of these…”

“That's the nice thing about the private markets is that Once you invest, you can't sell, and usually for the best companies, that's a huge benefit ultimately.”

“Because it is un-American, right? You have to meet this threshold.”

“There is very little money in DC today that's in alternatives or private markets. Small amounts, very bespoke plans, but virtually all of the allocations today are sitting in public markets.”

“What's more likely is we over time as an industry work on daily pricing, all of the various different private markets.”

“There's no doubt in my mind in a decade from now, we will see very meaningful allocations within that DC market to private markets. Whether it's 10%, 15%, it's going to be really, really big.”

“We realized that you cannot be a specialist in both public and private markets at the same time. You need to start with your beachhead.”

“The public markets now are giving me cheaper capital than the private markets, because if you're, if all the numbers are as reported, you're getting roughly 10 X revenues, and the fine folks at Figma are getting between 17 and 30, depending on how available yo…”

“US, the entire bubble is, is now in the private markets, and it's not been tested.”

“When I, before going to the road shows, when I talked to my counterparts who would raise money in the private market, the conversations are a lot different, a lot about time, a lot about good potential un sort of undiscovered time, et cetera. Here it's a lot a…”

“There's very few high growth companies in the public markets because all that growth has been annexed by the private markets as a bizarre outcome of, you know, ill-informed regulation.”

“The interesting comment is in the public markets, when things start going south, because there's liquidity, everybody can have a stop loss of 10% and get out, and then someone else can come in and think it's going to turn, and you know, yeah, yeah, you can hol…”

“Today, trillions of dollars in capital are moving from one place to another, in most cases in one direction, from public markets to private markets, which really causes a lot of liquidity management challenges for the various allocators.”

“I can make and I buy the argument that large portions of the retail market are under allocated into private markets. I think that there are large portions of the retail market that are probably not super well equipped to have that, have a ton of exposure. We'r…”

“So I think the biggest trend is the merger or the blend of Private markets and public markets coming together in one place in one orchestrated system, which is what we're aspiring to build. We call it the total portfolio solution.”

“The problem that's happened in private markets in general is The best companies have lots of options. They can raise money from anywhere. So they sort of like don't consider retail. They don't consider retail. And that leads to this adverse selection problem w…”

“Today, on average, across all of Hightower, think of us as five to six percent allocated to privates.”

“We think that number is going to be 12 to 15% over the next three to five years.”

“And they've realized that in private markets, for example, the optimal number of funds in a portfolio should actually be between It's like 22 and 27 funds, where as we started shifting there and offering more choice, our clients were like, aren't you diluting …”

“And there's no doubt that bizarrely enough, The cost of capital in the private markets remains cheaper than the public markets.”

“Based upon our conversations with wealth platforms and advisors, we think that two to three percent should ultimately be 10, 15 plus percent. And if you were to do the numbers, that just means that there's literally trillions of dollars of money that's in moti…”

“The reality is private markets are growing by leaps and bounds. And if you think about it, even in the equity space, More and more companies are staying private for much, much longer. So it's early, early days before we worry or get concerned about our ability…”

“I'd also tell you that the value add is much more significant, whether it's in credit or infrastructure, real estate, there's anywhere from a couple hundred to hundreds of basis points of excess returns that you can generate relative to public benchmarks.”

“What we have seen in private markets is a very, very wide range between first quartile and fourth quartile managers. There, I would say, if you're a fourth quartile manager, you're probably not delivering value above your fees.”

“If we really are talking about companies that are going to get to some level of AGI such that they're going to be, you know, not just multi-trillions, but potentially larger than that. If we're talking about how Starlink and, you know, the kind of assets being…”

“Pre-private markets infrastructure becoming the next market structure evolution, in my view, after equities fixed income derivatives, but very informative in terms of how I think about the technology evolution that's happening in private markets from pre to po…”

“That's really the big pony here, is there's trillions of dollars in Wealth Channel Capital that is looking to flow into private markets because they're under allocated.”

“The institutional world, which you've covered tremendously well with capital allocators. And the wealth worlds are kind of converging. Institutions are trying to think about how they think about private markets. The wealth channel is now starting to think abou…”

“The top six firms account for the majority of market share of capital raised in private markets. On average, the top six firms, 20, 24, they raised twelve billion dollars. The top seven through 25 firms only raised 1.7 billion dollars.”

“I'd say roughly about, on average, one to three percent of the 145 trillion of assets that Bain talks about is actually allocated to private markets within the wealth channel.”

“The wires, I still think will be the largest source of flows from the wealth channel into private markets.”

“Those types of things I think are what private banks are trying to do to differentiate themselves because now the wealth management space is getting increasingly competitive and crowded when it comes to accessing private markets.”

“Insurance companies are going to be much bigger allocators. Lincoln recently partnered with Bain and Partners Group, these really strategic partnerships. They have hundreds of billions of dollars in the general account to invest into private markets and So the…”

“I actually think what we now have, Weirdly is effectively several markets for companies that are pretty decoupled from each other and kind of have their own logic and exist in their own vacuum. So like there is a public market, like the public market exists is…”

“Where we're at is we now have this new innovation, which is late stage capital that can basically keep you private for as far as we can tell, maybe forever, because you can kind of outrun the problem of converting these companies into burn companies to cashflo…”

“The core analytical questions I think are pretty similar. You have different sources of information, whether you're doing public or private, but like you're still looking for the same characteristics, right? Like if you make it very simple, you're still lookin…”

“But I think there are fewer participants in the growth stage today than there was in 2020 and 20 21. And you could say, well, those are anomalous years, but I actually, I still think there has been consolidation within the growth stage of the private market.”