Investment implications

• Firms driven by intangible assets stay private longer and create opportunities across investor portfolios.
• You can seek out intangible-heavy firms with predictable and stable cash flows whose strengths may not be fully captured in legacy credit rating risk models (e.g., subscription-based enterprise software platforms).
• Given the availability of late-stage private capital and reduced disclosure requirements, weightless firms in DMs are staying private for longer. As a result, growth in public equity issuance is likely to be driven by EMs over the next decade. Investors should consider tilting their public equity allocation towards EMs.
• Investors wanting to capture technology-forward weightless companies in developed markets should consider shifting their allocations in those regions towards private equity and debt markets.
• You should consider repositioning real estate portfolios for firms' growing reliance on a flexible, mobile workforce (and diminishing need for fixed office space).