As the market broadens beyond the AI trade, shifting Fed signals and lofty earnings expectations demand more active judgment.
The first phase of the AI trade rewarded broad calls: “Buy power!” “Sell software!” The next phase will require much more discrimination across business models, capital structures, and industries.
Whether M&A or IPO activity is slowing or thriving, a strategy focused on secondary private equity may provide more stable cash flows compared to primary investments. However, the diversification of the underlying assets in the portfolio will likely play a key role in determining the level of cash flow.
Individual investors can now access the formerly exclusive club of private equity through registered investment vehicles that focus on secondary investments, allowing for greater flexibility and potentially accelerated cash flow.