Enthusiast of the Private Sector Economy
Wolfgang Baum, a seasoned investor, has been focusing on private capital markets for many years, with over 15 years of experience in this asset class. Initially, he focused on private equity funds with growth and buyout strategies, but his interests have expanded to include venture capital, secondaries, and co-investments.
Baum has a significant portion of his wealth invested in private asset classes, with over 80% allocated to this sector. He views the illiquidity of private markets as a significant advantage, preventing him from exiting at the wrong time. This long-term approach aligns with his investment philosophy.
The potential returns and relative outperformance compared to liquid stock markets are appealing to Baum. He finds private markets particularly attractive due to a larger portion of value creation in companies happening off the stock market, as they tend to stay private longer.
Baum has learned valuable lessons from his direct investments in startups, particularly in the face of failures. He has experienced setbacks in the startup scene, but these experiences have shaped his investment strategy.
Larry Fink, CEO of Blackrock, advocates for the 50-30-20 rule: 50% stocks, 30% bonds, and 20% alternative asset classes like private market funds or crypto investments. While Baum does not explicitly follow this rule, he shares Fink's appreciation for the role of private markets in a diversified investment portfolio.
Baum is a proponent of private markets in the context of retirement savings. He believes that they play a crucial role in providing investors with opportunities for growth and potential returns.
In recent years, Baum has increasingly invested in some German unicorns - startups valued at over 1 billion euros. He cites unlisted companies like Stripe, SpaceX, and OpenAI as examples of private market success.
Baum is an advocate for the increasing trend of private capital markets opening up more to private investors. He welcomes this development, recognising its potential to broaden the investor base and further fuel the growth of the private market sector.
While specific insights about Baum's approach to investing in private capital markets or the lessons he has learned from his startup investments are not readily available, accessing his direct interviews, publications, or talks focused on private markets and entrepreneurship may provide further insights into his investment philosophy and strategies.
- Baum's investment philosophy is founded on the belief that private markets offer potential returns and outperformance compared to liquid stock markets, with a larger portion of value creation in companies happening off the stock market, which he finds appealing.
- Recognising the potential to broaden the investor base and further fuel the growth of the private market sector, Baum welcomes the increasing trend of private capital markets opening up more to private investors.
