FEATURED ARTICLE

Mutual Funds Up Private Firm Investing

By Eve Tahmincioglu

Mutual funds largely invest in publicly traded corporations, but a new report finds an increase in private company investments.

That infusion of money from mutual funds may be delaying some private firms from going public, according to the findings of  Mutual Fund Investments in Private Firms, a recently published report put out by professors at Drexel University’s LeBow College of Business and the University of Iowa.

“We tend to think of these funds focusing on the public firm,” explains Michelle Lowry, a coauthor of the study and finance professor at LeBow. “We’re seeing it move into the private space, and at the same time we have private companies reluctant to go public as early as they might have 10 to 15 years ago.”

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OTHER PERSPECTIVES

Waiting For Mega Private Firms to Go Public

By Eve Tahmincioglu

Aspen Institute CEO Walter Isaacson told CNBC this week that investors should be watching a host of private technology firms as a possible future investment.

Companies such as Uber and Airbnb, and others that don't get as much fanfare, including Houzz, Stripe and Dropbox, aren’t on “the public market radar yet but will be over the next 12 to 18 months," he explained. "We think that’s a healthy undercurrent.”

Indeed, it’s quite healthy. The number of private tech firms with a market value of more than $1 billion rose by 40 last year, boosting the overall list to 183 such firm globally, according to CB Insights, a venture capital data base firm.