Investment firm Cogence, in partnership with BlackRock, has launched diversified portfolios that provide retail investors access to private markets amid a shrinking universe of listed companies. Publicly listed firms now represent only 12% of global companies with over $100-million in revenue, pushing investors beyond the Johannesburg Stock Exchange. The move addresses the migration of value creation to private equity and credit, with projections for private markets to grow by nearly 50% by 2029.
The landscape of investment opportunities is shifting as companies remain private longer, limiting access for everyday investors. Data from Cogence, presented alongside BlackRock, shows that the average age of companies at initial public offering has risen from eight years in 2004 to 14 years in 2024. In the US, 87% of companies valued over $100-million are private, according to Benjamin Alt, head of global private equity portfolios at Schroders.
This trend is fueled by capital demands from artificial intelligence and the low-carbon energy transition, which require massive funding for data centres and power grids. Private credit and infrastructure markets are stepping in to finance these projects, often bypassing traditional banks. Liam Davis, BlackRock's chief investment officer for wealth solutions, highlighted hyperscalers—data centres supporting AI expansion—as key assets largely outside public markets.
The traditional 60/40 portfolio of equities and bonds is losing reliability, especially after the end of the 'Great Moderation' period of stable conditions. Davis noted increased market volatility, with bonds no longer providing a consistent buffer against equity declines. Private markets offer diversification, linked to different risk factors.
Cogence's new portfolios allocate 15% to unlisted assets like private equity, credit, infrastructure, and real estate. Available through Discovery's Local Endowment structure using European Long-Term Investment Fund 2.0 mechanisms, they target over 10% annual returns in euros for the private portion, with a two-year liquidity constraint—shorter than the traditional five to seven years. Cogence CEO Jonel Matthee-Ferreira emphasized the uniqueness of this BlackRock partnership for retail access.
Davis cautioned on the illiquidity: 'Private markets can provide some exciting upside. It does have its own risk: it’s not fully liquid.' Alt added that private equity demands a mid- to long-term view, unlike the quick trades of public markets.