It is not just the consistency of performance that makes private markets attractive at the moment. For one thing, notes Woolt, in times of greater volatility in the public market, private assets have historically seen less volatility than public markets, which in recent weeks has been shaken by turbulence not seen in decades. Is. The private market is also home to thousands of companies globally – 95,000, to be a bit more precise, with an average annual revenue of over $100 million – while only 10,000 companies that meet that criterion exist on the public side.
“In the US, 87% of companies with revenues exceeding $100 million are private; in Europe, it is 95%. The opportunities set for investment are huge,” says Woolt. “The public sector is also becoming increasingly concentrated, Which only adds mismatches.”
Beyond the large ocean of opportunities, Woolt says, private markets have a proactive and long-term approach professional investors are able to take. By fixing companies, equipping them with the proper tools, and helping them find the right connections, private equity investors are able to snag the type of outperformance that more and more institutions and individual investors are looking for to achieve their various objectives. is required to do.
According to Hamilton Lane, fundraising levels for private market funds are on track to jump 25% from 2020 to 2021. And while data trends point to investors shifting their focus to assets with larger organizations, there remains an appetite and interest in emerging and diverse managers.
“Data from the Canadian Venture Capital and Private Equity Association points to record fundraising levels in the Canadian context from the institutional side,” says Woolt. “At Hamilton Lane, we are also experiencing increased levels of fundraising on both our institutional and retail sides, and we are continuing to build our team locally to support that growth.”
