More than a decade ago, the market for late-stage private equity took shape. During the recovery from the financial crisis in 2009, investors began searching for strategies to achieve outsized returns and found that opportunity in late-stage private equity, primarily amongst a growing swath of tech and social media companies. They realized that by accessing the steepest part of these companies’ growth curve, they could reap outsized rewards versus investing at the public listing.
Read MoreGlen Anderson, Rainmaker Co-founder and CEO, details how evolving macro dynamics, market participation, and investor priorities have shaped the secondary landscape – and the opportunity ahead for dealmakers.
Read MoreThe IPO market may be poised for a resurgence in 2024, following a dismal year in 2022 for listings and a sluggish 2023, despite an encouraging string of 2H23 listings from companies such as Arm, Klaviyo and Instacart.
One possible catalyst for a resurgence in the IPO market is the macro landscape. The NASDAQ ended the year up 43%, yields on the 10-year treasury dropped nearly 100 bps during 4Q23 and the VIX is as low as investors have seen in half a decade.
Read MoreWith recent news of OpenAI planning to sell employee shares at a valuation of $86 billion, it's evident that the demand for AI investment is on the rise.
On the RMS platform, bids for names like OpenAI, Anthropic and Scale AI are leading the sector with year-to-date trading at an average increase of just over 19% compared to respective previous rounds.
Navigating Complexities
Navigating the intricacies of private market investing requires a robust Rolodex and technical expertise far exceeding that of most investors.
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After a significant sell-off in tech last year, 2023 has seen a rebound in both private and public markets. Particularly across private markets, interest in AI is driving a material part of this activity resurgence. For many investors, there’s developed a mounting pressure to be an early mover in the space.
This month, OpenAI is set to start selling employee shares at a valuation of $86 billion. The timing is fortuitous for the buyside, as we’ve recently seen the reopening of the IPO market promising near-term liquidity.
AI’s potential returns, combined with favorable market conditions, have created an intriguing proposition for many. The private market demand we see signals that, without question, AI is the next categorical investment strategy.
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