NASDAQ’s Portal Market
NASDAQ is set to launch what its executives are calling one of the most significant developments on Wall Street in decades: A private stock market for super-wealthy investors. Minimum requirement for traders: US$100 million in assets. Any private firm can list on Nasdaq’s new platform, which is called the Portal Market, and raise money by selling stock to an elite group of shareholders. Once a tiny influence on the markets, private money has gained unprecedented power on Wall Street. This year, the biggest deals have been swung not by public companies, but by private equity firms that are spending hundreds of billions of dollars to buy household names, such as Hilton Hotels, Sallie Mae and Chrysler, and turn them into private companies. These markets are creating an alternative and exclusive investment world buffeted from the turmoil that has roiled the major stock indicators in recent weeks. In the public markets, investors dumped stock during a credit crisis caused by the deteriorating mortgage industry. Private-market traders generally are sophisticated financial groups that take a long term view of their investments.
“One of the problems that business faces in America today is what I would call ’short-termism,’” said Howard S. Marks, chairman of Oaktree Capital. “There’s a lot of expense and complication associated with being a public company today… Now it is possible to gain most of the advantages of being public while sidestepping the disadvantages.” The rise of private money has created a new class of powerbrokers on Wall Street who have enriched themselves even as they provided billions of investment dollars to companies in all kinds of industries. But the trend is causing a backlash among working-class Americans who generally are shut out from investing directly in those circles.
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