The Merging of Public and Private Equity Markets
Assessing the Impact of Fintech and the Fourth Industrial Revolution on Equity Capital Markets
Abstract
Skillsets which were traditionally the preserve of corporate finance departments or equity capital markets are increasingly becoming democratized, while blockchain / distributed ledger technology provides further opportunity to streamline processes and thus further blur the distinction between public and private equity markets. Against this backdrop this report explores the implications for one of investment banking’s most closely guarded areas: equity capital markets.
The Merging of Public and Private Equity Markets
Private markets have grown substantially in recent years due to:
- Inflow of capital from family offices, institutional funds, venture capital, and corporate venture capital.
- The shortening in lifecycles of technology companies between startup, ramp-up, and maturity.
- Seamless P2P connectivity between investors and issuers.
This is all coinciding with the new technology revolution termed the Fourth Industrial Revolution as breakthroughs emerge from fields such as artificial intelligence, robotics, IoT, and many other areas.
“These breakthroughs offer enormous potential returns to investors and the increased size and efficiency of private markets mean companies can delay the need to come to the public markets via IPO,” says John Dwyer, senior analyst and author of the report.