When Portfolio Adviser surveyed its readers a few years back on the types of private assets that most piqued their interest, the response, with a few exceptions, could be characterised as one giant shrug. Given what has happened in the intervening period – not least the dent in the reputation of that hitherto handy little phrase ‘patient capital’ – that indifference seems likely only to have deepened.
What then would need to happen for professional investors to view unquoted stocks and other private assets in a more favourable light? For Christopher Mills, the forthright CEO and manager of the North Atlantic Smaller Companies trust, who has been investing in unquoted stocks for decades, the answer boils down to “greater transparency on valuations” – though he has a good deal more to say on the subject, as you can read on page 22.
Ahead of that, we take a closer look at the assertion in a recent white paper that, while public market participants have been “dazzled by the IPOs of high-profile but unprofitable companies”, the real hard work of building businesses is going on in the private markets. Admittedly, the paper’s authors just happen to invest in those very markets themselves – but turn to page 18 and decide for yourself if they have a case.