Why Private Markets?
Accessing unique late-stage Venture Capital opportunities in the burgeoning private innovation economy with untraditional liquidity and low-to-negative correlation to public equities.
Why Private Markets?
The public market is shrinking as companies stay private for longer. The private market is now predominant. (Please refer to the charts below)
Private markets poised for continued growth - 86% of institutional investors invest in alternatives, allocating on average 23% of their portfolios (with private equity the largest subclass, followed closely by real estate).***
Number of domestic companies listed on NASDAQ and NYSE:
Source: World Bank as at 31 Dec 2019.
*Center for Research In Security Prices, CRSP 1925 US Stock Database, Wharton Research Data Services as at 31 Dec 2023.
**Capital IQ as at 31 Dec 2023.
***Source: Liberty Street Advisors, Fidelity as of September 6, 2023.
*Center for Research In Security Prices, CRSP 1925 US Stock Database, Wharton Research Data Services as at 31 Dec 2023.
**Capital IQ as at 31 Dec 2023.
***Source: Liberty Street Advisors, Fidelity as of September 6, 2023.
Key benefits of investing in private markets:
Significant growth in private companies:
Source: Pitchbook as of 1/12/2023
Christian Munafo, Chief Investment Officer, provides an overview of the opportunities in private markets
Christian Munafo, CIO of LSA, provides an overview of the opportunities in private markets.
Why Late-Stage Venture Capital?
Late-stage Venture Capital sits between early-stage Venture Capital (VC) and traditional Private Equity (PE) buyouts and focuses on backing already successful companies with proven products, strong operating models, established market share, strong management teams and a near-term exit path.
Investors in this asset class aim to participate in the potential capital appreciation of these dynamic innovation companies whilst under private ownership which can yield outperformance. Historically, roughly two-thirds of VC-backed companies exit through Mergers & Acquisitions (M&A) versus public listings, meaning that public investors often miss out on a large segment of the addressable opportunity set.
Source: The Private Shares Fund, Pitchbook, Y-Charts, Nasdaq, SEC Edgar. Total 746 U.S. Venture-Capital-Back Private Companies that executed an IPO from January 01, 2010 through March 31, 2023. Last private financing prices adjusted for subsequent stock splits to allow for appropriate comparisons. Only includes formerly VC-backed, U.S. companies listing on the NYSE or NASDAQ. Analysis tracks the change in price for an individual share at last private financing, and therefore does not factor in potential tax implications or management and performance fees that may be associated with investments in private markets. Past Performance is no guarantee of future results.
Why semi-liquid private equity (PE)?
Experienced Investment Team
Deep relationships throughout the Venture Capital /growth ecosystem drive significant deal flow and information access
Invest through both secondary transactions and participation in new financing rounds
We focus on what is called later stage venture capital and growth oriented investing... beyond start-up phase of development and the associated technology risk. These companies have often validated the value proposition for their product or service, they have an established market presence.
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The Private Innovation Economy
25 June 2024
Given the shift of capital from public to private markets, and the trend of high-growth companies staying private longer, Liberty Street Advisors’ Christian Munafo explains how investors can tap into these dynamic, innovative and revenue-rich late-stage US businesses during their most exciting development phases.
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