EpicureanDealEpicurean Dealmaker
@felixsalmon There is and always has been a size cutoff between public & private capital markets. Efficiency barrier. +
felixsalmonfelix salmon
@EpicureanDeal but private companies are often now very big indeed. Eg TXU, Facebook -- way bigger than minimum size for going public.
EpicureanDealEpicurean Dealmaker
@felixsalmon Companies undergoing transformation or restructuring, e.g.--like those owned by PE firms--are much better off in private hands.
felixsalmonfelix salmon
@EpicureanDeal agreed. And that's a problem for public markets and for individuals who would like to be able to invest in such companies.
EpicureanDealEpicurean Dealmaker
@felixsalmon So they must do it by proxy, through 401Ks, mutual funds, pension funds, where most individuals have their equities anyway.
felixsalmonfelix salmon
@EpicureanDeal right. So if you're lucky enough to be part of a DB pension fund, you have access. Those of us in the DC world, not so much.
EpicureanDealEpicurean Dealmaker
@felixsalmon Well, lots of us don't have effective access to credit markets, derivative markets, commodity markets, etc. either. And?
EpicureanDealEpicurean Dealmaker
@felixsalmon Again, you may *want* access to certain markets, but why should it be a policy objective to supply you with it?
EpicureanDealEpicurean Dealmaker
@felixsalmon You really think most individuals want direct or proxy access to highly illiquid private equity? The "underlyings" don't trade.
The_AnalystJordan Terry
@EpicureanDeal how dare you question The Public's right to shoot themselves in the foot with investments they dont understand?!?!
EpicureanDealEpicurean Dealmaker
@felixsalmon If people really want access to the PE model, they can buy Blackstone, Apollo, and KKR's existing or pending equities
EpicureanDealEpicurean Dealmaker
@felixsalmon The biggest capital providers remain all of us, through our proxy participation in institutional investors, not plutocrats.
EpicureanDealEpicurean Dealmaker
@felixsalmon You have a business model: develop an ETF that invests in private equity. I might wonder why it hasn't been done already.
DoubleDeuceDoubleDeuce
@felixsalmon @epicureandeal I agree with that but it's not "impossible" but pretty damn close; It's not a $ issue, it's minimal opportunity.
EpicureanDealEpicurean Dealmaker
@felixsalmon + Companies best suited to public ownership have a *specific* profile: growthy, transparent, predictable. Not all companies do