Episode 119 – How do you innovate? Quietly then loudly.

In this episode of Perspectives, Escala Chief Investment Officer, Tracey McNaughton, talks about the role private markets play in quietly innovating and why patient capital is so important. Public markets in contrast are getting noisier and more volatile. What is the role for both in a portfolio? (1:02) We have had some good feedback on the podcast you did with Lane McDonald, the CIO at SCS Financial. The whole issue of public versus private markets is something that has grabbed the attention of clients. Why is that do you think?  (4:36) This goes to the long-term thinking by private companies doesn't it and the patience private companies are given by their investors.  (6:17) You don't see this same level of volatility in private markets. (7:56) I suppose one of the other big trends clients are seeing is the rise of ETFs. How is that impacting the market? (9:41) And I guess the situation is made so much worse with ETFs now making up more than 50% of the entire US equity market. (12:27) Do you think this goes some way to explaining why the market looks so expensive? (13:01) Does this then mean by comparison the private equity market is cheaper since it doesn't suffer the same afflictions as the public market in terms of concentration and passive ETF flows? (14:47) You mentioned earlier that public markets are becoming more private and private markets are staying private. Some would argue that private markets are becoming more liquid with the rise of evergreen private funds – funds that don't lock investors capital away for 7 plus years. What do you think of this trend? (16:33) Where do you think we will be in 5-10 years given these trends in the structure of the market? (19:00) So for investors, that means the question won't just be 'public or private,' but how to balance both in a portfolio that's built for the long term. Thanks Tracey that's all we have time for …