Listed and unlisted assets: what synergies are possible?

Listed and unlisted assets: what synergies are possible?

Terms of Reference:

Listed and Unlisted Assets: What Synergies Are Possible?

1. Background

The investment landscape has evolved over the past few decades, with institutional investors increasingly looking to diversify their portfolios by incorporating both listed and unlisted assets. Listed assets, such as publicly traded stocks and bonds, provide liquidity and transparency, while unlisted assets, including private equity, real estate, and infrastructure investments, offer the potential for higher returns, reduced volatility, and greater control over operational performance.

Despite their differences, there is growing recognition that synergies between listed and unlisted assets can offer strategic advantages. For instance, combining the liquidity and market-driven pricing of listed assets with the long-term growth potential and risk diversification of unlisted assets can provide a balanced investment approach. This panel seeks to explore the synergies between listed and unlisted assets, identify potential benefits for investors, and provide recommendations on how to structure investment portfolios that effectively leverage both asset classes.

2. Objectives

Overall Objective

To assess the potential synergies between listed and unlisted assets and develop recommendations for investors on how to integrate both types of assets into diversified portfolios effectively.

Specific Objectives

  • Analyze the characteristics of listed and unlisted assets, and identify their respective advantages and disadvantages
  • Explore the benefits and risks of combining listed and unlisted assets in investment portfolios
  • Examine how listed and unlisted assets can complement each other in terms of risk management, return optimization, and diversification
  • Identify examples of successful strategies or models that combine listed and unlisted assets
  • Provide actionable recommendations for institutional investors on structuring portfolios with both listed and unlisted assets
  • Investigate the role of governance, regulatory frameworks, and market structures in facilitating synergies between listed and unlisted assets

3. Scope of Work

3.1 Thematic Areas

  • Investment Characteristics: Liquidity, valuation, transparency, risk profiles, and return potential
  • Synergies and Diversification: How the integration of listed and unlisted assets can enhance portfolio diversification, reduce volatility, and increase long-term growth potential
  • Risk Management: Managing market risk, liquidity risk, operational risk, and country-specific risks
  • Asset Classes: Listed equities, fixed income, REITs, private equity, private debt, real estate, infrastructure investments
  • Portfolio Management: Strategies for combining listed and unlisted assets in balanced portfolios, including asset allocation models
  • Regulatory and Governance Considerations: Implications of market regulations, governance practices, and reporting standards on the integration of listed and unlisted assets

3.2 Sectoral Focus

  • Private Equity & Venture Capital: Synergies between publicly traded companies and private equity investments
  • Real Estate & Infrastructure: Combining listed real estate investment trusts (REITs) and unlisted property investments
  • Public and Private Debt: Evaluating the balance between publicly traded debt and private debt markets
  • Commodities: Role of listed commodities (e.g., gold, oil) in portfolios alongside unlisted assets
  • Sustainable & Impact Investing: How integrating listed and unlisted assets can support ESG (Environmental, Social, Governance) and impact investing strategies

3.3 Geographic Coverage

  • Global focus with specific attention to emerging markets, developed markets, and key regional investment hubs.
  • Country-specific analysis could be considered for regions with notable differences in the listed and unlisted asset markets (e.g., North America, Europe, Asia, and Africa).

4. Key Research Questions

  • What are the key characteristics of listed and unlisted assets, and how do they differ in terms of liquidity, valuation, and risk profiles?
  • How can investors create synergies by combining listed and unlisted assets in portfolios?
  • What are the advantages and potential risks of integrating these two asset classes?
  • What are the key strategies used by successful investors or funds in combining listed and unlisted assets?
  • How do regulatory frameworks and governance practices affect the integration of listed and unlisted assets?
  • What are the optimal portfolio management strategies for incorporating both listed and unlisted assets to achieve long-term growth and risk mitigation?
  • How can ESG (Environmental, Social, Governance) and impact investing principles be applied to both asset classes?