Exciting aspects of investing in private markets

Written by Robert Picard | July 17, 2024

Robert Picard highlights the things he finds most exciting about private markets investing

Key Takeaways

For Robert Picard, the most exciting thing about private markets - and something he tries to share with clients - is the opportunity to participate in and invest with some of the most promising founder-led companies.
Private equity and venture capital provide early-stage access to companies in many exciting sectors, including artificial intelligence, robotics, and cybersecurity. They are also helping to revitalize supply chains that broke during the pandemic.
Private credit strategies are - in several areas of the economy - supplanting traditional banks as a preferred lender for many companies.

My name is Robert Picard. I head up private market solutions at Hightower Advisors. Hightower is a community of 135 separate advisor businesses and wealth management firms spread across the United States in approximately 34 different states.

What is most exciting to me and what I try to share with our clients and our wealth management teams about investing in private markets is, number one, the opportunity to participate and invest with some of the most promising founder-led companies, both in the venture capital and private equity world. This could be in areas like artificial intelligence, cybersecurity, or one of the themes we're looking at right now: post-pandemic supply chain reshoring to the United States. This reshoring has spurred industrial spending and manufacturing with meaningful multiples, creating opportunities in automation and robotics. These are really exciting areas to explore, even when I'm on the 18th green.

Another fascinating area is the migration of lending away from community banks and the traditional banking sector to private markets. There are funds available to high-net-worth individuals and super high-net-worth individuals where you essentially become the bank. These funds lend money to real estate companies, manufacturing companies, and other key areas of our economy. As an investor, you are rewarded like a banker, earning revenue after extending these loans and receiving interest on the lending.

One more exciting aspect is the real estate sector. In the U.S., we're short about 4 to 5 million single-family homes. Many families with several children can't live in multifamily apartments or two-bedroom units—they need single-family homes. There are funds now that focus on building single-family rental homes to help close this gap. Additionally, there's a large opportunity in warehouses, industrial logistics real estate, and participating in infrastructure projects like wind farms, solar panels, toll roads, wireless towers, and data centers. These opportunities, traditionally unavailable to the average investor, are now accessible thanks to the democratization and miniaturization facilitated by new platforms developed over the past several years.

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