The IPO market has lost a lot of relevance : According to Swiss asset manager Partners Group.
According to Steffen Meister, the executive chairman of global private markets firm Partners Group, the traditional IPO market has lost much of its relevance for the real economy and, more specifically, for private markets. Meister noted that in recent years, four out of five businesses in the IPO market were non-profitable, reflecting a shift away from traditional public market offerings. He pointed out that private markets offer long-term funding and provide a financing role for the real economy that is distinct from the IPO market.
Private equity has been outperforming public markets in recent years, and Meister believes that private markets are taking on a more significant role in supporting the real economy. Partners Group, with $142 billion in assets under management as of the first half of 2023, sees this trend as part of a broader shift in the financial landscape.
Meister also highlighted the substantial opportunities in the healthcare sector, particularly in areas like advanced therapies and biologics. He mentioned the growing importance of artificial intelligence (AI) in transforming various industries and the economy as a whole.
Regarding interest rates and central bank policies, Meister suggested that direct lending from private markets will become more consistent and substantial, potentially reaching the level of a multi-trillion-dollar industry. He believes that this trend will reduce the reliance on traditional banks for financing.
In conclusion, Steffen Meister’s insights reflect the changing dynamics of financial markets, with private markets gaining prominence and offering attractive opportunities, especially in sectors like healthcare and AI. This shift could reshape how companies raise capital and how investors access the real economy, potentially making private equity and direct lending increasingly important in the financial landscape.
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