Enthusiast Dedicated to the Private Sector
Wolfgang Baums, a self-proclaimed "enthusiast" of private capital markets, has been investing in this asset class for over 15 years. He started his journey with direct investments in startups and later expanded to private market funds, with a focus on private equity funds with growth and buyout strategies.
In recent years, Baums has increasingly focused on secondaries and co-investments, as this market has become more dynamic. He believes that private capital markets are crucial in the context of retirement savings, offering the potential for returns and relative outperformance compared to liquid equity markets.
Baums is particularly drawn to companies that are worth billions but are not yet listed, such as Stripe, SpaceX, or OpenAI. He welcomes the trend of companies staying private longer before going public, with a larger portion of value creation happening off the public markets.
The illiquidity of private markets is a significant advantage for Baums, as it forces him to be calm and prevents him from exiting at the wrong time. He emphasises the importance of investors being advised appropriately and risks being adequately explained.
Despite some naive or overly optimistic investments in the startup scene, Baums remains optimistic about the future of private capital markets. At a recent industry event in Frankfurt for asset managers, he was introduced as a "private-markets fanatic".
It's worth noting that Baums has over 80% of his wealth invested in private asset classes such as venture capital or private equity. However, specific details about his investment strategy or its evolution over time are not readily available in the public domain.
Blackrock CEO Larry Fink advocates for the 50-30-20 rule: 50% equities, 30% bonds, and 20% alternative assets like private market funds or crypto investments. As the private capital markets continue to grow and evolve, Baums' approach and insights could provide valuable insights for other investors looking to diversify their portfolios.
- Wolfgang Baums' investment focus has expanded over the years from direct startup investments to including private market funds, with a strong preference for private equity funds with growth and buyout strategies.
- With over 80% of his wealth invested in private asset classes like venture capital and private equity, Baums' approach could offer valuable insights for investors seeking to diversify their portfolios, as advocated by Blackrock CEO Larry Fink.
