Public vs private
Equity markets may be hitting fresh highs, but the shift towards private asset classes — ironically fuelled in part by passive money flows into stocks — looks inexorable.
Global share markets may have rallied this year (the ASX hit another fresh record high on Tuesday) but the head of one of the world’s largest investment firms still thinks they are failing the next generation of the world’s best companies.
Scott Kleinmann, the co-president of USD700 billion ($1 trillion) New York alternative asset manager Apollo Global pointed out that around one third of the stocks in the US S&P 500 are actually down this year, and the vast remainder are only up modestly.
All of the gains are being driven by a handful of mega cap stocks, led by Nvidia. It makes for a market that is “not a lot of fun” for mid-sized public companies, or for that matter, the stock pickers trying to generate returns from investing in them.
“The big, massive, passive indexes aren't buying you [and] you know the days of the mutual fund stock picker looking for undervalued stocks? Well, that business is going away,” Kleinmann told the Livewire Live investor forum in Sydney on Tuesday.
