Private market investing momentum in AI infrastructure is backed by $18.5B in fresh commitments in Q2 2024, according to CB Insights. Market consensus is that demand for high-compute server farms will double by 2026, driving valuation multiples higher. Over a 10-year period, the UK’s second biggest trust Scottish Mortgage SMT has beaten all but two of the listed private equity investment trusts: With an annualized return of 17.74%, this trust was just behind HgCapital’s 17.75% and 3i’s 26.39% return over 10 years. Over 20 years, Scottish Mortgage was in second place with an annualized return of 14.66% versus 3i’s 15.85%. The “optimal” allocation to private markets will depend on each investor’s goals and characteristics. Most notably, whether the investor is optimizing for long-term growth or income, and how tax sensitive they are.
