How Private Markets Are Reshaping Small-Cap Investing in the US
What are the key advantages of accessing small-cap investments in private markets?
Private markets are fundamentally reshaping traditional public markets. Firms are competing more aggressively with public firms, disrupting industries. High-growth companies are opting to stay private, bypassing public markets entirely.
Costs for taking public firms private are climbing, shrinking the small-cap universe. Small-cap stocks now lag far behind large-caps in returns and market share, while relative quality of small-cap stocks is declining as volatility increases. Fewer small-cap stocks are graduating to higher benchmarks, decreasing diversification opportunities.
What risks do investors face with these types of funds? Active managers are prioritizing stronger-quality companies less vulnerable to private market pressures. In certain small-cap indexes, small-cap funds show pronounced performance gaps.
Download the report now to discover to more trends driving this transformation and what small-cap underperformance means for your clients' investment strategy.
