FT News Briefing The risks of private capital
Oct 28, 2021
Robin Wigglesworth, the Financial Times' global finance correspondent and expert in private markets, dives into the murky waters of private capital. He highlights the rapid growth of private markets, valued at around $8 trillion, and discusses the enticing yet risky nature of these investments. Wigglesworth raises alarms about transparency issues and the systemic risks they pose to the broader economy. He also touches on the activism of hedge funds like Third Point demanding change from large companies, making for a compelling conversation on finance's evolving landscape.
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Private Markets Risk
- Private markets, including venture capital and private equity, have grown massively.
- Their lack of transparency raises concerns about potential risks.
Shell Break-Up Call
- Third Point, an activist hedge fund, urges Royal Dutch Shell to break up, citing an incoherent strategy.
- They argue Shell's current structure hinders its energy transition efforts and investor returns.
Shell's Structure
- Third Point believes Shell's structure, while serving some investors, is too complex and unsuitable for the energy transition.
- They propose separating legacy oil/gas assets from clean energy projects for better financing.