- It’s “really hard” to be a public company right now, a senior Baillie Gifford fund manager said.
- They face reporting requirements and shareholders with different interests, Peter Singlehurst said.
- “You can build a better business by staying private for longer,” he told the 20VC podcast.
Companies should stay private for longer because they can “build a better business,” a senior fund manager has said.
“It’s really hard to be a public company. It’s really hard,” Peter Singlehurst, head of private companies at British investment management firm Baillie Gifford said.
Singlehurst made the comments in an interview with 20VC podcast host Harry Stebbings.
“I think what people realize today is that you can build a better business by staying private for longer,” Singlehurst said.
He described the reporting requirements as a burden for publicly listed companies.
“You can have people owning your shares for all sorts of reasons that are misaligned with what you’re trying to do as a company,” Singlehurst said, adding that everything the company does has to be done “in the cold light of day.”
“All your competitors get to know pretty much everything about your business because you have to tell your shareholders pretty much everything about your business,” he said.
He recalled Tim Sweeney, CEO of Epic Games, once telling him that it was much easier to be private. But Sweeney also said going public can be the better option, depending on what your business needs to do, Singlehurst said.
He added that reasons for going public can include the need for liquidity, the desire to acquire other companies, or engaging with regulators.
But he said there had been an “evolution” of “very large, company-facilitated secondary rounds,” which could become a source of liquidity for investors in private companies.
Singlehurst didn’t cite specific examples, but Tesla’s stock has slid in recent weeks amid declining sales and a backlash to CEO Elon Musk’s political interventions. The fall has proven a boon to short sellers betting the stock will lose value.
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