The success and depth of US capital markets to finance entrepreneurs and successive tech revolutions has been extraordinary – fuelling the exceptionalism of the US economy. In contrast, the UK is more risk adverse towards start-up opportunities. That’s largely cultural, a reflection of the more mature, later-stage British Economy. What will happen when the US economy is also past its top, and following the UK into maturity?

Blain’s Morning Porridge 24th April 2025 – Private Assets, Contagion [...]

The amount of “dry powder” earmarked for the Alternatives Market is said to exceed $4 trillion. While the sector continues to attract new money, the competition for deals should be rising – in fact finding good deals is more difficult as economic conditions remain tight and impose funding discipline.

This week will be about US bonds – watch carefully how the arguments develop as we sit at a new cusp for markets. In stocks it’s about narrative and I can’t help but wonder if we’re about to see a corporate denouement as Tesla does a “deal” to map China to boost its FSD ambitions.

The Bank of England is concerned about financial institutional risk associated with the rapid growth of private capital markets. A PE or Private Credit market crash would trigger a liquidity event which spawns crisis, but also massive opportunity. It will be yet another consequence of regulation and mispriced money in the wake of the 2008 GFC!

The UK’s FCA is considering “valuations” in the Private Capital sector. That triggers alarm bells. Bi-lateral private markets are an important part of the professional financial system, but fall outside traditional regulation. Is it time to bring them onside?

Markets are in a fluster over US banks, but that’s not the real problem. There is a looming crisis about to roil markets stemming from inflated  valuations in the Private Asset sector. This is going to get really messy. Hard Hats on!

The extraordinary number of new unicorn companies isn’t necessarily a sign of booming corporate prospects and innovation. It’s as likely due to too much cheap money chasing the market, deliberate hype and deluding the masses as to their value.