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August 04, 2020

Public to Private Equity in the United States: A Long-Term Look

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August 04, 2020

Public to Private Equity in the United States: A Long-Term Look


Consilient Observer

Public to Private Equity in the United States: A Long-Term Look

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August 04, 2020

 
 
  • Over the past quarter century there has been a marked shift in U.S. equities from public markets to private markets controlled by buyout and venture capital firms.
  • This change has had reverberations for asset managers, investors, executives, and policy makers.
  • In this report we seek to answer the following questions:
    • What have been the major drivers behind the shift from public to private equities in the U.S.?
    • Why are there fewer public companies today than there were 25 years ago? 
    • What are the long-term trends in buyouts? 
    • What are the long-term trends in venture capital? 
    • Where do we go from here?
 
 

RISK CONSIDERATIONS

Diversification does not protect you against a loss in a particular market; however it allows you to spread that risk across various asset classes. There is no assurance that a Portfolio will achieve its investment objective. Portfolios are subject to market risk, which is the possibility that the market values of securities owned by the Portfolio will decline and that the value of Portfolio shares may therefore be less than what you paid for them.

Market values can change daily due to economic and other events (e.g. natural disasters, health crises, terrorism, conflicts and social unrest) that affect markets, countries, companies or governments. It is difficult to predict the timing, duration, and potential adverse effects (e.g. portfolio liquidity) of events. Equities securities’ values also fluctuate in response to activities specific to a company. Privately placed and restricted securities may be subject to resale restrictions as well as a lack of publicly available information, which will increase their illiquidity and could adversely affect the ability to value and sell them (liquidity risk). Alternative investments are speculative and include a high degree of risk. Investors could lose all or a substantial amount of their investment. Alternative investments are suitable only for long-term investors willing to forego liquidity and put capital at risk for an indefinite period of time. Alternative investments are typically highly illiquid – there is no secondary market for these private funds, and there may be restrictions on redemptions or assigning or otherwise transferring investments into private funds. Alternative investment funds often engage in leverage and other speculative practices that may increase volatility and risk of loss. Alternative investments typically have higher fees and expenses than other investment vehicles, and such fees and expenses will lower returns achieved by investors. 

 
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Counterpoint Global consists of 54 people, including 30 investors, four disruptive change researchers, two consilient researchers and two sustainability researchers. Counterpoint Global’s culture fosters collaboration, creativity, continued development, and differentiated thinking.
 
 
 
 
 

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