Market fluctuations? Let me tell you, it's a seesaw
When discussing the latest market developments, how often have you mentioned activity that was seen by public and private capital, whether that meant residential real estate seeing declines, natural gas prices seeing hikes, or markets seeing consolidation? Or read headlines that saw events, or listened to speakers describing otherwise inanimate actors observing the very trends that affect them?
Here is an example ‘…like buyout, these funds saw a large decline in activity…’. But funds are not people, and they don’t feel or see anything (the corporate personality is a topic for separate discussion). Often wrongly categorized as the passive voice, these are in fact active intransitive verbs. Technical details aside, the effect is to locate activity in non-actors.
This linguistic device is so far from the way we speak in real life that when Orhan Pamuk published ‘My Name is Red’ in 1998 with whole chapters written from the point of view of objects or concepts, it was a literary sensation, and remains memorable to this day.
Our markets are so complex, and the influences on them so multifaceted, that they can at times seem to have lives of their own. It was only this year that SVB collapsed, but amid all the geopolitical turmoil, conflict in the Middle East and Ukraine, inflation, and interest rate hikes, that seems a world away.
In which case, putting some linguistic distance between ourselves and such events might make them easier to understand. And de-personalizing them might also absolve us of responsibility for them. But as Chomsky reminds us, “Passivity may be the easy course, but it is hardly the honorable one.” With that in mind, Preqin remains a standard-bearer for industry trends where private equity can have a positive influence, and where investments can generate global change.
So why then has this lexicon of passive observation developed around markets, and why have participants adopted it so widely and rapidly? It wouldn’t be the first time that capital has been thought of as having a persona (money never sleeps, remember?), or acting independently of players. It’s so widespread that we don’t even realize we’re using it.
All professions do this, and it’s well documented. Lawyers and doctors have long been famed for developing language that marks them out as members of their respective communities (Latin, anyone?), and at the same time excludes non-members. In the UK, doctors famously wrote messages about awkward patients in acronyms only intended for colleagues. Sometimes this is essential, because the information being conveyed is sensitive, or because sharing that vocabulary overcomes other barriers. Mathematicians of any nationality happily trade formulae, irrespective of first language. But often it can blur meaning, making it harder even for seasoned experts to know what to think.
Lack of transparency has frequently been cited as a problem for the alternative assets industry, and the SEC this year attempted to address these perceptions. It’s not useful if crucial information is shrouded in terms of art because that only encourages claims of secrecy. Naturally, commercially sensitive information is private, and must always be respected as such, but we can strike a balance.
Markets are composed of people (and AIs, of course), and the data Preqin collects represents the cumulative effects of those participants’ actions. In turn, the things we do to that data to make it useful are by nature active and conscious, helping to shape the debate around trends and commenting on what we have observed, albeit always in an even-handed and neutral way. For example, our recent Preqin Private Capital Fund Terms Advisor 2023 report (for insights+ subscribers) helps the industry understand practice around fees, and therefore promotes fairness and transparency, as does the work of Colmore.
As curators of private capital data, Preqin might be forgiven for hiding behind industry standard terms or codes. We are part of the alternatives industry, and many rely on what we do to conduct business. We could talk in riddles, but clear communication is our guiding principle, and we strive for clarity and simplicity across media. What good is data if not provided in useful forms accompanied by insightful analysis, expressed in readily digestible and actionable words?
By the end of 2023, we’ll have published around 155 reports, 195 issues of Preqin First Close, 210 news items, 100 blogs and 15 factsheets. We hope you have found them useful, and above all, clear.
The opinions and facts included in the above do not constitute investment advice. Professional advice should be sought before making any investment or other decisions. Preqin accept no liability for any decisions taken in relation to the above.