Robinhood plans to do so launch a publicly traded fund that allows US investors to gain exposure to privately held companies such as SpaceX and Stripe.
It reminded me that this is an area where we British investors actually have it better.
Similarly, news of another company’s soon-to-be listed US venture capital fund called Power law. It is an investor in OpenAI and pioneering arms maker Anduril, among others.
These kinds of risky but potentially revolutionary startups are meat and potatoes for Baillie Gifford, the Scottish manager who runs investment funds such as Scottish Mortgage and Edinburgh Worldwide.
And in my opinion, the investment trust structure is the ideal vehicle for holding private companies for the long term. It avoids the liquidity problems you inevitably get with open-ended funds that hold illiquid assets. And a trust’s transparency requirements and independent board of directors mean – at least in theory – additional safeguards for ordinary shareholders.
Ironically, a major reason that the investment trust sector has been under pressure in recent years is precisely the fact that some trusts have large stakes in unlisted companies!
Even the legendary RIT Capital is still trading at a discount to net assets of more than 25%, thanks in large part to its private holdings.
And this despite a track record of private investments that previously delivered good returns for the fund.
Worthy of trust
The absolute amounts controlled by such trusts are small in the grand scheme of things. Mighty Scottish Mortgage – by far the largest – has an asset base of just £15 billion. Many others – like titchy Augmentum – manage only a fraction of that.
It wouldn’t take much new money to grow such trusts. In an ideal world I think they would expand gently and not be confronted existentially Busy to survive.
Of course, they must deliver returns that make maintaining the trust worthwhile in the long term. Discount risk is also a headache for many ordinary investors.
But the trusts really do offer a different exposure (compared to, say, a trust holding FTSE 100 shares) and I think we take them for granted.
Investing in private assets is not for everyone these days. But there is an argument that this could happen someday. Public markets worldwide are shrinking. We’ve also seen the rise of unlisted ‘startups’ worth hundreds of billions of dollars, which most investors have no exposure to – and therefore don’t benefit from.
Hopefully we still have a vibrant investment trust industry that can serve retail investors as and when we need them!
Have a nice weekend.
From Monevator
Returns are not average – Monevator
Investing in the light of AI: beauties or the beasts? – Monevator [Mogul members]
From the archiver: Gagadom and The Grim Reaper – Monevator
News
Lower food and fuel prices drive inflation back to 3% – BBC
Record-breaking budget surplus as government tax revenues rise – Air
Household energy bills are expected to fall by £117 per year – Guardian
UK unemployment reaches highest level in almost five years BBC
Small investors in Brewdog reel as brewer is put up for sale – This is money
Man receives £42,000 bill for data roaming charges in Morocco – Guardian
Supreme Court rules that Trump’s ’emergency tariffs’ are illegal… – CNN
…and Trump immediately announces a 10% global tariff after the reprimand – Air
UK flat prices fall after sharp decline in London [Paywall] – FT
Record number of private limited liability companies established in 2025 – This is money
Products and services
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Are you ready for HMRC’s Making Tax Digital self-assessment shake-up? – Guardian
Natwest offers a £150 switching bonus and 7% savings interest rate, with the benefits being: This is money
Should you engage a mortgage advisor to take out a mortgage? – Which one
Get up to £1,500 cashback when you transfer your money and/or investments to Charles Stanley Direct via this affiliate link. Terms and conditions apply – Charles Stanley
The best auto-saving hacks and apps – Be smart with your money
The tax burden drives high earners to foreign bonds [Paywall] – FT
Banks reduce mortgage interest for starters with small deposits – This is money
Password managers’ promises that they can’t access your vaults aren’t necessarily true: Ars Technica
Get up to £3,000 cashback when you open or switch an Interactive Investor SIPP. Terms and fees apply, affiliate link – Interactive Investor
Tembo HomeSaver review: 5.75% if you save for a house [Catches!] – BCWYC
Five ways AI could reshape your relationship with money – The conversation
Does your car insurance really cover stolen property? – Which one
Homes for sale with lush lawns, in photos – Guardian
Commentary and opinion
The ruthless hunt for low-paid work: “It’s like the Hunger Games” – Guardian
Inflation is more important than returns for retirees – White coat investor
“Why I tell my children to saddle themselves with student debt” – This is money
Is it better to rent or buy when you retire? [Paywall] – FT
Young Brits on why they moved abroad – Guardian
AI comes to FI – FIRE vs. London
Don’t worry too much about small things – An educational moment
The Best Strategies to Boost Initiating Withdrawals in Retirement – Morning star
US stocks are still 40% more expensive than non-US stocks – Apollo
Escaping the permanent underclass may not be necessary – Financial Samurai
Active managers continue to lose while passive investing grows – Larry Swedroe
Naughty angle: active antics
The Eternity of Intelligent Investments – King’s well
How to Be One of the Less Terrible Retail Investors – Morning star
Fund that beats 99% of peers says few software companies will survive AI – Bloomberg via Yahoo
Let’s talk about the new Berkshire Hathaway – Brooklyn Investor
Crazy Money and the Great AI Race – ABOUT
Bayes and base rates [Nerdy, PDF] – Morgan Stanley
Kindle Book Bargains
The prosperity ladder by Nick Maggiulli – £0.99 on Kindle
How to work without losing your mind by Cate Sevilla – £0.99 on Kindle
Million dollar weekend by Noah Kagan – £0.99 on Kindle
The Pension Manual by Ted Heybridge – £0.99 on Kindle
Or opt for an investment classic – Monevator shop
Environmental factors
Plug-in hybrids use three times as much fuel as claimed, analysis shows: Guardian
China kills the fish – Noahpinion
Environmental groups are suing Trump’s EPA for retracting climate research Guardian
The curse of dead coral – Biographical
Robotoverlord collection
Why AI Writing is So Boring and Dangerous: Semantic Ablation – The registry
The AI disruption we’ve been waiting for is here – NOW [h/t Abnormal Returns]
AI takes a look at the online dating scene – PitchBook
Video Game Experts Say Google’s Project Genie Isn’t an Industry Killer – Sherwood
The rise of AI productivity is finally visible [Paywall] – FT
Not at the dining table
British trade after Brexit: not pretty – Klement about investing
How Brazil stopped a Trump-style authoritarianism – Vox [h/t Abnormal Returns]
Trump’s new world order is real and Europe must adapt quickly – BBC
The Grift Economy Goes Mainstream – Your brain about money
Trump’s ruthless self-promotion is fostering an American cult of personality – NOW
Mini-special for the office versus working from home
The end of the office – Andrew Yang
Younger companies and leaders are embracing more remote work, research shows Sherwood
The worst-case scenario for white-collar workers – The Atlantic Ocean
The US office market is as K-shaped as the US economy – Bloomberg via AP
Out of our league
Why Europe doesn’t have a Tesla – Works in progress
The biggest myths about attraction, debunked by science – Next big ideas club
Creepy in the future – Kevin Kelly
And finally…
“I thought the destination was the most important thing, but it turned out to be the journey.”
–Clayton Christensen, How will you measure your life?
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