Why investment trusts must tread carefully when it comes to private investments

Establishing differences between minority and majority investing

In two decades, the number of companies listed on US exchanges has fallen by more than half, while global equity markets have shrunk as more companies opt to buy back their own shares, and succumb to M&A.

On the other side, companies are opting to remain private until they are much larger than they have historically. This has been demonstrated succinctly by the so-called unicorns; the 260 or so private companies around the globe valued at over $1bn each. Increasingly, the trend towards fast-growing companies remaining private begins to have consequences. For public market investors, the biggest impact is they have an increasingly reduced choice of where to put equity capital to work. Without addressing the private company investment universe, it is undoubtedly the case investors are li...