Hedge funds are putting in more money in private companies as profits grow rapidly and more firms are going public, the WSJ reported.
- Schulte Roth & Zabel LLP Partner Jason Kaplan said there is huge demand for private companies among hedge funds.
- The funds are enticed by the ability of private companies to drive returns and mitigate some of the risk of public markets.
- Several managers also have the advantage of charging higher fees in private investments.
- Among the funds that are stepping up investments in private companies is Viking Global Investors LP, which targets $1 billion from its first dedicated private-equity fund.
- Other funds boosting investments in private companies are Maverick Capital Ltd., and Lone Pine Capital LLC.
- Year-to-date, the United States recorded over $312 billion of registered equity offerings, up from $290 billion over the decade ending 2020.