Michael Mauboussin – Great Migration Public to Private Equity - [Invest Like the Best, EP.189]

The transition from public to private equity markets reflects a long-term decline in the number of listed U.S. companies, driven by higher regulatory costs and the increased ability of firms to scale using private capital. Michael Mauboussin, head of Consilient Research at CounterPoint Global, highlights that while public markets remain significantly larger than private alternatives, the rise of intangible assets—such as software and intellectual property—has fundamentally altered corporate valuation and financing. Companies increasingly utilize stock-based compensation as a form of internal financing, while network effects allow superstar firms to capture disproportionate market share. Although private equity has historically provided higher returns, success remains highly dependent on identifying top-quartile managers, as the dispersion of returns in these asset classes is substantial compared to public markets.