Podcast Episode Details

Exploring Private Market Investing with Cole Pearson

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Episode 599

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They’re not listed on stock exchanges, yet private market investing opportunities are becoming increasingly popular.

So, just what are private markets? Why would you want to consider making them a part of your portfolio? And how would you go about it? Cole Pearson is here today to break it all down for us.

Cole Pearson is the President of Investment Solutions at OneAscent, a family of companies seeking to help people align their investments with their Christian values. OneAscent is also an underwriter of Faith & Finance. 

What Is Private Market Investing?

Private market investing involves putting capital into companies that are privately held rather than those listed on public stock exchanges. Unlike investing in publicly traded firms, private market investments focus on businesses that are in earlier stages of development.

You might think of the local hardware store or a manufacturing plant in your area—these are privately held businesses. Private market investing tends to focus on rapidly growing for-profit businesses that can serve as powerful economic engines while also having the potential for positive impact.

Investors often hear terms like private equity, venture capital, and private credit when discussing private markets. These investments provide opportunities to support growing businesses while diversifying a portfolio beyond publicly traded stocks.

Public vs. Private Markets: Which Is Safer?

One common concern is that private markets may be riskier than public investments. Public markets are typically considered safer because of regulatory oversight and greater liquidity. However, all investments involve risk—whether public or private.

Private markets offer unique advantages that can complement a traditional portfolio. While they may be less accessible and require a longer-term outlook, they also provide exposure to businesses at earlier stages of growth, offering potential for higher returns.

Historically, private markets have been dominated by institutional investors and ultra-high-net-worth individuals. Institutions tend to allocate five times more to private markets than the average retail investor.

This is largely due to the potential for higher returns, market inefficiencies, and diversification benefits. In the U.S., there are approximately 4,000 publicly traded companies with over $10 million in revenue—but in the private markets, there are 182,000 companies above that threshold. That means there’s a much larger opportunity set available for investment.

The Advantages of Private Market Investing

Private market investments offer several key benefits:

1. Higher Growth Potential

Many public companies started as private, venture-backed firms. Today, these once-private companies make up nearly 77% of market capitalization and contribute 92% of research and development spending. Private investing allows access to these high-growth firms before they go public.

2. Diversification

Private investments are less correlated to the stock market, helping investors diversify their portfolios. Their value isn’t directly impacted by daily market fluctuations, reducing exposure to broader economic downturns.

3. Direct Positive Impact

Unlike public market investing, where shares are traded between investors, private market investments directly fund businesses. This allows investors to have a greater say in how companies operate and ensure that their investments align with biblical values.

One of the most compelling reasons to consider private market investing is the opportunity for faith-based impact.

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Published on 9 months, 3 weeks ago