top of page

How do private markets interact with public markets?

Curious about private markets

How do private markets interact with public markets?

Private markets and public markets are closely interconnected and often have an impact on each other. Private markets investments typically involve investing in private companies or assets that are not publicly traded, while public markets investments involve buying and selling securities on public exchanges.

One way in which private markets and public markets interact is through initial public offerings (IPOs). Private companies that want to raise capital may choose to go public through an IPO, which allows them to sell shares to the public and become publicly traded. This can provide an exit opportunity for private markets investors who have invested in the company prior to the IPO.

In addition, public market trends can have an impact on private market investments. For example, if there is a downturn in the public markets, this may lead to a decrease in valuations of private companies and assets as well. Conversely, if there is a bullish trend in the public markets, this may lead to an increase in valuations of private companies and assets.

Private markets can also have an impact on public markets through the activities of private equity firms. Private equity firms often acquire public companies through leveraged buyouts, which can lead to changes in the management and operations of the company. Private equity firms may also take public companies private, which involves delisting the company from public exchanges.

Overall, private markets and public markets are closely interconnected, and changes in one market can have an impact on the other. It is important for investors to be aware of these interactions and to understand how private market investments fit into their overall investment portfolio.

bottom of page