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With strong companies seeking stable, long-term
capital and investors seeking long-term exposure
to quality businesses, the stage is set for a new,
more efficient approach to private equity investing.
Most institutional investors rely on a mix of publicly traded equities and leveraged buyout-style private equity as their core driver of returns. Because many companies no longer find either of these forms of ownership attractive, a large population of productive businesses has become difficult for investors to access.
To invest in these companies, a new private ownership model is needed.
Against the backdrop of a contracting public equity market and a maturing buyout industry, we expect more and more best-in-class companies to be owned by long-term private vehicles, to the benefit of both investors and the companies themselves.
Population of U.S. public and private companies
Sources: BlackRock Investment Institute, with data from U.S. Census Bureau-Statistics of U.S. Businesses; Droidge, Karolyi, and Stulz (1988-2012); Wilshire Associates (2013-2014).
Private equity assets under management
Source: Preqin, 2018. Includes undeployed capital. Balanced strategies invest in all stages of development. YTD total as of March 31, 2018.