The Buried $150 Billion Bet Inside the Top 20 U.S. Stocks
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What private-market trend is driving investor interest right now?
Hey, What's News listeners. It's Sunday, August 2nd. I'm Luke Vargas for The Wall Street Journal, and this is What's News Sunday, the show where we tackle the big questions about the biggest stories in the news. High risk, high reward. That is the promise of access to private markets. SpaceX set off a massive IPO wave earlier this summer, and OpenAI and Anthropic are gearing up to go public later this year, but they've built up a lot of market value while still being privately held. New marketplaces have made it easier for everyday investors to grab shares of private companies, and big asset managers are getting into the game too. But what if you've already got exposure and you just don't know it?
This week, we're serving up an episode of WSJ's Take on the Week as host Telus Demos dives into the $150 billion private markets bet that's inside America's biggest companies, and whether that might offer the diversification you're looking for. And if you like what you hear, listen and subscribe to WSJ's Take on the Week wherever you get your podcasts.
Hi, everyone. I'm Telus Demos. Welcome to another episode of WSJ's Take on the Week. We've got another special episode. We've been doing a lot of special episodes lately. It's summertime, you know, so you've got to mix it up. And so I'm joined today by Spencer Jacob. You've heard his voice on WSJ podcast many times. Spencer, welcome.
Hey, thanks for having me.
For those who don't know Spencer. Well, Spencer was my editor on heard on the street for a long time. And now Spencer writes our morning markets a.m. newsletter. So what is your title officially these days?
Newsletter guy. Newsletter guy. Head newsletter guy in charge. Yeah. It's still free, by the way, for anyone listening. Just Google Markets AM and you can get it.
It's a fantastic read. I do. I do. If you're not already getting it, you absolutely should. And so today we wanted to talk about – the reason I brought Spencer in is because he wrote something really interesting lately about the role that private markets are playing in what's going on in the public markets. And I also came across some really interesting research on this topic from our guest Caitlin Hendricks. Caitlin, hello.
Hi. Thanks for having me.
Caitlin is the Asset Allocation Research Director at Dimensional Fund Advisors. And I know in this show we've been talking a lot lately about the IPO market and looking at companies that recently transitioned from the private market to the public market, such as SpaceX, for example, right? And so looking at SpaceX and what's happened to it, it's now trading actually below its IPO price as we're talking now. So it went up a bunch recently. Now it's back down. And so, you know, you might wonder, like, well, who made money in SpaceX, right? Because even if you'd bought it in the IPO, you wouldn't have. Well, if you'd bought it way before it went public, when it was a tiny private company, when it was still just sort of a germ of an idea and you had somehow gotten your hands on some stock, well, you'd probably still be making money, right?
Somebody, I mean, it's a trillion-dollar company. Somebody made money there, right? And so all of this talk of the IPO markets maybe begs the question of whether or not we should be looking at – actually these companies way sooner in the private markets. And there's no shortage of people these days who will urge you to invest in the private markets. There are funds that focus on that. So I wanted to dive a little deeper into that topic. And like I said, Spencer had been writing about it. And Caitlin, the thing that I came across that you wrote that jumped out at me was about private market exposure in the public markets. I thought this was a really interesting way to look at it. So tell me about what you were writing about.
Yeah, it's hard to unpack. But we looked at the 20 largest U.S. companies, which account, by the way, for 40 percent of the market cap in the U.S. And we said these companies have exposure to a lot of private companies.
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Chapters
5 chapters
1
What private-market trend is driving investor interest right now?
0:03–5:22
2
How do big public companies hold stakes in hot private startups like Anthropic and Stripe?
5:22–18:27
3
How much private-company exposure might my S&P 500 index fund already include?
18:27–19:47
4
What are corporate venture capital arms and subsidiaries, and which companies use them?
19:47–29:58
5
How large is the buried $100–$150 billion private investment inside the top 20 U.S. firms?
29:58–34:08
Speakers
5 identifiedMore from WSJ What’s News
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