NewsHK
The private markets boom in aerospace has a familiar side effect: winners get large.
SpaceX shares have appreciated sharply enough that various university endowments holding stakes in the private company now carry concentration risk in their portfolios. For endowments, the problem is structural.
Unlike public equities, a private stake cannot be trimmed on a Tuesday afternoon. The standard rebalancing tools of institutional portfolio management are, at minimum, slow.
When a private holding appreciates sharply, the weighting it commands in the overall portfolio drifts upward without any active decision by the investment office.
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