Why Patience Pays: The Strategic Advantage of Long-Hold Private Markets

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Welcome to Unlocking Liquidity, the podcast from PrimaryMarkets that brings the dynamic world of private capital to life. Each week, we dive into the trends, opportunities and challenges shaping today’s investment landscape, from emerging asset classes and market innovation through to strategies for navigating liquidity in unlisted markets. Whether you’re an experienced investor, a dealmaker, or simply curious about private markets, Unlocking Liquidity offers analysis and real-world insights to help you make sense of complexity and stay ahead of what’s next.

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In this episode we look at the lessons from long hold private market strategies...

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In an age where liquidity and short-term performance often dominate investor attention, the private markets continue to stand apart for their more disciplined embrace of time.

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This asset class rewards patience not merely as a virtue, but as a strategic advantage.

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For wholesale and sophisticated investors seeking to balance return potential with genuine diversification, long-hold assets in the private markets can offer a powerful lesson in how value is truly created.

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While public markets move in daily cycles of news and sentiment, private markets thrive on the slower cadence of operational improvement, market positioning and long-term compounding growth.

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The best outcomes are rarely the result of quick exits or opportunistic flips.

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Instead, they stem from sustained value creation over many years, sometimes a decade or more, underpinned by consistent strategic execution and the ability to ride through economic cycles rather than react to them.

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One of the Private Markets core appeal lies in the control over value creation.

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For example, by taking significant ownership stakes, private investors, together with founders and management can actively shape business direction driving performance through governance, strategic clarity and capital discipline.

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But this takes time.

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Growing and expanding into new markets, rolling out and embedding new technology, or restructuring cost bases doesn’t occur over a single reporting period.

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Data has shown that, as an example, the average holding period for private equity assets globally has extended from around four years in the early 2000s to closer to six or seven years today.

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This shift reflects an evolution in thinking: longer holds are not a sign of inefficiency, but of maturity in a value-creation strategy.

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Australia’s private capital markets now valued at over $100 billion have mirrored this global pattern.

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Across infrastructure, healthcare, technology and energy transition sectors, Australian private market investors have demonstrated that taking the long view can deliver superior risk-adjusted returns.

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Unlike the short-term focus of listed markets, where companies are often pressured to meet quarterly earnings expectations, private market investment allows management teams the space to execute meaningful operational growth or change.

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Over time, incremental improvements in productivity, pricing power and customer retention can compound to create significant enterprise value.

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Consider Pacific Equity Partners, one of Australia’s largest and most successful private equity firms.

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Its long-term stewardship of companies such as Spotless Group and GenesisCare highlights the compounding benefits of patient private capital.

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PEP’s investment philosophy emphasising deep operational engagement and measured exits has delivered consistently strong returns through multiple economic cycles.

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Long-hold strategies also serve an important role in risk management.

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By extending investment horizons, private investors can navigate short-term volatility and macroeconomic uncertainty.

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The ability to hold through down cycles rather than being forced to sell in unfavourable conditions often protects capital and enhances returns over the full investment life cycle.

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During the COVID-19 pandemic, for example, investors that were able to support portfolio companies through the disruption rather than exit prematurely generally saw stronger recoveries.

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The lesson is clear: when investors can afford to wait, value has time to rebuild and compound.

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Moreover, patient capital allows private investors to align their timelines with the natural growth curves of their industries.

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In sectors like renewable energy, healthcare technology or advanced manufacturing where commercialisation and scaling take years, short-term horizons can be structurally misaligned with the realities of business development.

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Long-hold investors, by contrast, are positioned to nurture these opportunities through each stage of their evolution.

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Nowhere is the advantage of long-hold private capital more apparent than in Australia’s infrastructure and energy sectors.

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Institutional investors such as IFM Investors and Macquarie Asset Management have built global reputations on patient investment strategies, where steady, inflation-linked cash flows and the ability to enhance assets over time have created enduring value.

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Essential assets like airports, toll roads and utilities are not designed for rapid turnover but for stable compounding returns across decades and are therefore ideally suited to long-term holdings.

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Investors benefit from predictable income streams and exposure to real assets that often outperform during inflationary periods.

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The renewable energy transition offers another good example.

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Projects in wind, solar and battery storage often require long development and payback periods, yet they can present sound opportunities for investors willing to adopt a longer-term view.

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Australian investors have demonstrated how long-hold capital can catalyse the build-out of critical infrastructure while generating attractive long-term yields.

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Even in technology and growth equity, traditionally seen as faster-moving domains, longer holds can produce standout results.

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The rise of Australian tech success stories such as Canva, which has remained private for an extended period while it achieves global scale, underscores how patient ownership can enable founders and investors to capture full value potential before engaging public markets.

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At its heart, successful long hold investing requires a particular mindset.

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Patience is not passive, rather it demands conviction, discipline and a willingness to resist the constant temptation of short-term liquidity.

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Investors must be prepared to trade immediacy for depth recognising that private markets reward those who align their time horizon with the process of real economic value creation.

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In this sense, patience becomes a differentiator.

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In a world awash with capital seeking rapid returns, the ability to hold steady and allow strategies to mature is increasingly scarce and therefore valuable.

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The emotional fortitude to stay invested through uncertainty is often what separates top investors from the rest.

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One of the traditional challenges of long-hold private unlisted equity has been liquidity or the lack thereof.

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Investors have had to accept the trade-off between higher potential returns and the inability to access capital for extended periods.

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However, innovations in secondary trading platforms such as PrimaryMarkets are beginning to reshape that equation.

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By facilitating the buying and selling of unlisted securities, these platforms provide a mechanism for investors to manage liquidity without forcing companies to compromise their long-term strategies.

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This secondary market access allows investors to participate in the long-hold value creation process while retaining liquidity optionality – a development that makes private capital more accessible and dynamic.

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For sophisticated investors, this represents a significant evolution.

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It means that patient capital can remain patient, while still being flexible when personal or portfolio circumstances change.

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The combination of strategic illiquidity and selective liquidity is likely to define the next generation of private capital investing.

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The most consistent lesson from long-hold private unlisted equity is that time is an active ingredient in value creation.

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It allows investors to compound growth, smooth volatility and align investment strategies with structural trends rather than cyclical noise.

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But it also requires alignment between companies and investors – shared conviction in the power of patience and an understanding that real growth takes time.

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For wholesale and sophisticated investors in Australia, this may mean rethinking the role of private capital within broader portfolios.

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Instead of viewing it purely as a source of outsized returns, it can be seen as a stabilising anchor – a strategy that complements liquid assets with long-term exposure to the real economy.

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As global markets continue to navigate inflation, geopolitical uncertainty and technological disruption, the ability to look beyond the next quarter may prove to be private market’s greatest edge.

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Investors who understand the compounding power of time and who align themselves with disciplined, long-hold strategies, are positioned to capture enduring value.

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Australia’s private capital ecosystem, rich with experienced managers and opportunities across emerging sectors, offers fertile ground for this approach.

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From infrastructure to innovation, from healthcare to renewables, the story remains the same: patience pays.

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In an era obsessed with speed, the most enduring success often belongs to those who take their time.

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For companies and managed funds that are not listed on a stock exchange, the PrimaryMarkets trading Platform is an ideal way to facilitate the off-market sale of shares in your company and units in managed funds.

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PrimaryMarkets is a flexible and evolving Platform that responds in real time to an ever-changing investment environment.

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In doing so, it provides sophisticated investors with access to companies that are shaping the future in a wide variety of industries and sectors.

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We provide access to opportunities previously only accessible to institutional investors.

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In addition to trading, PrimaryMarkets helps companies raise capital from our global investor database.

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PrimaryMarkets exemplifies how innovation can transform the way we invest, trade and raise capital by breaking down traditional barriers, providing liquidity solutions and promoting transparency.

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As the Platform continues to grow and evolve, it promises to unlock even more opportunities for investors and companies shaping the future of economies.

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And that brings us to the end of this episode of Unlocking Liquidity. Thanks for spending your time with us, we hope today’s conversation gave you a fresh perspective on private markets and how liquidity is evolving. If you enjoyed the episode, please follow or subscribe wherever you listen, and feel free to share it with someone who’d get value from it. For more insights, opportunities and episodes, visit PrimaryMarkets. Until next time, thanks for listening, and we’ll see you in the next conversation.