In Parts 1 and 2 of our Venture Capital Investing for Private Investors series, we discussed how technology has enabled more investors to harness the growth potential of private companies and the macro backdrop related to investing in these types of companies. Here, we will share why size matters for private deals.
The consensus heading into 2019 was that the Federal Reserve’s Open Market Committee would raise the federal funds rate three times this year. Instead, the benchmark lending rate was cut last month for the first time since 2008. Concerns over a global slowdown, trade wars, and yield curve inversion have given the Fed air cover to be “proactive.”
Reading between the lines, however, we find it hard to determine if the rate hike is consistent with the Fed’s mandate of price stability and maximum employment.
In Part 1 of our Venture Capital Investing for Private Investors series, we discussed how technology has enabled more investors to harness the growth potential of these companies. Here, we will share some macroeconomic considerations specific to this asset class.
The following is an excerpt from our recently published Dynamic Growth Opportunities (DGO) portfolio update, which is available here to download.
As a fundamentally-based active equity manager, the core to value delivery for our clients is our continual ability to discern which companies' equity values will be disproportionately rewarded. In the same fashion that we relentlessly scour the investable universe to uncover companies better at adapting to an increasingly dynamic market, we also consistently reflect inwardly to ensure that our investment process remains sufficiently adaptable at uncovering the winners of today, as well as those that will unfold over the next decade and beyond.
Topics: Asset Management
Consistent with our mantra of delivering contemporary solutions to sophisticated investors, SWS Partners is continuously developing expanded opportunities for our clients. To do so, we have prioritized staying abreast of changing trends and demographics. The confluence of these factors has led us to spending more time and attention on venture capital investing. We simply define venture capital investing as investments in high growth, private companies, or those that are not listed on an exchange, such as the New York Stock Exchange or NASDAQ. Peloton, SoFi, Instacart, SpaceX, and Airbnb are common examples that fit this definition.