How have private investments changed?

In the past, a stock market listing was a coming of age for companies. It was proof that they had grown to a meaningful size and a way to raise money to fund expansion. The listing, or to give it its official name, Initial Private Offering (IPO), would provide the necessary capital.

The company would see its shares traded in London, New York or other major financial centres. The cash that came from selling a chunk of the company to investors would pay for bigger factories, increased production, or maybe fund expansion into new markets. In recent years, it has also helped pay for technology.

This method of raising money from private investors was traditionally a chance for wealthy individuals to share in the rewards that growth would bring – higher share prices and growing dividends.

That is changing. The availability of cloud-based technology and the ability to operate from anywhere in the world has reduced the need to buy expensive computer equipment and open new factories.

Companies are remaining private for longer and, often, when they do list on the stock market, it’s to release some of the value for founders or early investors rather than to fund expansion. That means many businesses become large while still in private ownership, and the chance to share that growth is rarely open to individuals.

To profit from these situations, investors must seek out funds that have access to private company investments. If you’re seeking financial services in Shropshire, we can advise you here at Hartey Wealth Management.


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