Now, you may or may not know of Oatly. They sell very carb-heavy milk substitute. Personally, I am a big fan and it has more or less replaced milk in my coffee.
Today though I am frustrated because of the news today that it has raised £200 million for expansion. Whilst I maybe a happy customer and pleased to see the company growing, I am dismayed by the use of celebrity endorsement.
Clearly, Oatley approached the mega US fund Blackstone to help with a capital raise. They in turn have found some of their own money, but then plied the celebrity contacts they have such as Oprah Winfrey to find the £200 million. As part of the deal, the celebs have then lent their name to the launch which will help promote the company.
The frustration for me is that all of this is in keeping with the trend away from the capital markets we have seen in recent years. Private funds, Private equity and private debt are all the rage. Going public, once the ultimate sign of success is relegated to a second order issue. In the US they have constantly lowered the amount of public equity needed, so that companies like Facebook can have what are effectively share listing when most of the money is still tied up with the original management - this used to be the key trade-off of going public, but no longer.
So we have companies like Oatly, doing well and now only available to the already rich and famous. If they do go public it will be the likes of Jay-Z who do best. Private Equity is not friendly towards retail investors. At least Blackstone is, maybe we have to console ourselves with owning shares in them.
Increasingly though public markets are falling in terms of capital allocation. This is in my view is a bad outcome for Western society. If means the value created by new business goes increasingly only to those founders and the already wealthy investors they started with. The little guy misses our more and more, even the little guy's helpers - the pension funds - are not really in this game anymore.
There is not much on the face of it you can do to stop this, rich people should be free to invest where they like and management free to raise capital from all legitimate sources. However, Governments could do more to reduce reporting requirements and increase tax incentives to go public so that we don't always see the rich getting richer.
