Invest Like the Best with Patrick O'Shaughnessy

Michael Mauboussin – Great Migration Public to Private Equity - [Invest Like the Best, EP.189]

Sep 1, 2020
Michael Mauboussin, head of Consilient Research at Counterpoint Global, discusses the notable shift from public to private equity markets. He explores the declining IPO landscape, the importance of intangible assets, and their impact on investment strategies. Michael emphasizes the need for better investment valuation in light of intangible assets and outlines the challenges of navigating private equity amidst increasing liabilities. He also provides guidance for young investors seeking unique opportunities and dives into the role of cognitive diversity in investment decision-making.
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INSIGHT

Staying Private Longer

  • Companies are staying private longer, leading to higher market caps at IPO.
  • This is due to increased funding sources in private markets.
INSIGHT

Venture Capital Exits

  • Venture capital exits now primarily consist of business sales, not IPOs.
  • Companies going public are older now than they used to be.
INSIGHT

Private Equity Returns

  • Buyouts historically outperform public markets with a PME of 1.2.
  • Venture capital returns are higher (PME of 1.4), driven by the dot-com boom.
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