Seconds

And it’s over. After 17 years of standing pat, the Bank of Japan has finally raised interest rates, to the soft POP of a slightly damp confetti bomb. The end of an era. That the money men will still print $40bn a month to gobble up government bonds suggests that happy hour is not yet over, but the move is likely to spark a slow re-appraisal of options for local investors, who sit on a substantial pile of overseas assets. With yields rising some may be tempted dog whistle those assets back home. Whilst a rate of 0.1% is hardly going to spark a stampede, the repricing of money globally has upended all sorts of tables. Take private markets. When funding rates are almost free, all sorts of crazy ideas get funded. When Central Banks, led by the Fed, started turning the dial, the vista changed. Those who did the funding, wanted to see some profits, a challenge that proved to be beyond many in the ‘ecosystem’. Cue a bonfire. And yet the cold fingered consulting group Bain write, in a recent report, about the now ripe brie of an opportunity to be found across private assets. Sellers abound. Investors across PE and VC need liquidity. The opportunity, so writes Bain, is in secondary funds; funds that take discounted stakes in late-stage growth businesses. Funds that deliver “strong, consistent returns for investors with less volatility.” Say WHAT? They also have a shorter payback period and serve up a “quicker path to a diversified portfolio for investors who are new to private markets.” Now there’s a thing. There are many reasons to buy something: a good-looking founder, a tax break, or – as is the zeitgeist – plain old FOMO, but the ultimate arbiter of future returns is the initial price paid. The business of buying discounted stakes in late-stage growth businesses, when set against public markets, distorted by passive flows and sweating it out at valuation extremes, sits somewhere between very sensible and compelling. Hmm.