Nasdaq Private Markets It highlights the performance of private securities compared to more traditional public listings.
The number of public firms has been declining for years due to aggressive overregulation and the cost of compliance. Meanwhile, there’s an ocean of sophisticated money looking to jump to the top of the capital gains queue by investing in early-stage private companies. Recent advances in technology and increased awareness of private markets have increased activity in the private securities sector. Whether primary offerings (funding rounds) or secondary transactions, private markets are becoming increasingly important in the capital formation equation.
NPM states that the year-to-date value increase of the private market tracker, which monitors the 50 largest private companies, is around 58%. Meanwhile, the S&P 500 is up around 11% for the year (after a very bad week).
Much of the private market activity comes from the booming artificial intelligence (AI) sector. The YTD return on AI/ML alone reaches a whopping 97.4%. Fintech is performing well at 26.1% and digital assets/blockchain is performing negatively (22.2%). Here are the top performers from NPM to date:
- Prometheus +524%
- BaseTen Laboratories +240%
- SambaNova +238%
- Clickhouse +232%
- Brain +188%
- Anthropic +173%
- Reflection AI +170%
- SB Technology +143%
- OpenEvidence +140%
- +137%
Not just private markets like NPM; Many online capital raising platforms and traditional securities crowdfunding have moved into secondary markets, giving accredited investors access to private firms.
If all goes well, legislation is underway to improve access to some of the most interesting early-stage companies working toward an IPO. The current definition of Accredited Investor is discriminatory and limits access to offerings under Reg D, the largest securities exemption for private offerings. The changes could expand the definition to include sophisticated individuals, not just those with large bank accounts.
