Even in Turbulent Times, Funds Will Keep Funding…
Is the Capital ‘Spigot’ Open or Closed?
Investing is a strange beast. One day all you see in the news is stories of the capital markets closing. The next day you read a story about large investment managers raising new funds and pushing into new areas.
We see an example of this detailed in a recent article in Fortune Term Sheet: “Venture capitalists may be predicting trouble ahead for the private markets — but Cathie Wood has always danced to the beat of her own drum. The chief executive of ARK Invest, the asset manager known for its bold — and risky — bets on tech and innovation, said yesterday afternoon that ARK is planning to launch a fund that will invest across both public and private markets. Right now, ARK’s funds invest solely in public equities.”
So, which is it? Are the private capital markets closed, or is there still opportunities being funded?
Maintaining a Multiple-Choice Mind in a Binary World
The truth is that the news cycle tends to be very binary — up or down, yes or no, right or left. The binary thinking prevalent in today’s society is constantly being jammed down our throats. As investors, you have got to push through that. The reality that we actually live in is not even close to binary. Reality is messy. Markets are even messier. Markets are not just up or down. They are sideways, lumpy, bumpy, up and down, advance/retreat — you get the idea.
Today’s markets have a lot to contend with right now: inflation, war, supply chain problems, divisiveness, etc. In times like this it is easy to predict that the markets will pullback or tighten up. Perhaps they will. We certainly can see evidence of this.
Let’s Face it — this isn’t Exactly Easy
I chose to highlight the example of ARK for a reason. They haven’t exactly had a great performance run over the last few months. As tech stocks have gotten battered and bruised, so has ARK. However, it is not fair to single them out. There are plenty of big-time, high-profile names that didn’t exactly get the last few months correct. From the article: ”But while it may not be an entirely new rodeo for Wood, it’s still a rather challenging time to debut a crossover fund. Hedge funds like D1 Capital Partners or…
