It’s a startling number. Over the last two decades, the number of public companies in America has declined by nearly 50% from 7,322 in 1996 to about 3,671 in 2016. At the same time, U.S. GDP has nearly doubled.

What’s going on? This subtle but inexorable migration of American business from public to private ownership was the subject of a presentation by iCapital’s co-founder and managing partner Nick Veronis at Financial Advisor’s Inside Alternatives & Asset Allocation conference in Las Vegas in September.

As companies remain private longer, the implications for investors are powerful. Veronis noted that an investor in Amazon’s IPO in 1997 would have seen her investment increase more than 900-fold. Compare that to the 20-fold increase in Google since its 2004 IPO or the quintupling in shares of Facebook since its 2012 IPO.

There are believed to be about 260 so-called unicorn start-ups, venture-backed companies valued at $1 billion or more, according to CB Insights. Veronis suggested that today’s venture capital and private backers are seeking to “extract most of the value out of their portfolio companies” before bringing them public, a marked change from an earlier generation of VC investors.

Other more disturbing trends may also be at work. Since 2000, the share of R&D expenses as a percent of revenue for the 100 largest non-financial companies listed on the Nasdaq has declined from 34.4% to 7.0% in 2017, Veronis said, citing data from Greenspring and Capital IQ.

This dramatic decline in R&D supports the argument of some like GMO’s Jeremy Grantham, who have said that in recent decades America’s largest corporations have become obsessed with maintaining record-high profit margins—some call it rent-seeking—while accepting less growth and innovation. Today’s generation of risk-averse CEOs at public companies favor stock buybacks and dividend increases over major investments requiring up-front losses.

Criticism of corporate America’s current set of priorities, labeled by some as “short-termism,” has also come from leading CEOs considered pillars of capitalism. That list includes Berkshire Hathaway’s Warren Buffett, JP Morgan’s Jamie Dimon, BlackRock’s Larry Fink, PepsiCo’s Indra Nooyi and even President Trump himself. Fink, in particular, has proposed lengthening capital gains holding periods to incentivize CEOs to focus on longer horizons.

Amazon, arguably America’s most successful public company, has treated the quarterly earnings ritual with outright contempt—and the stock market has rewarded it handsomely.

Though no fan of Amazon, the president recently asked SEC chairman Jay Clayton to examine the possibility of requiring public companies to abolish quarterly annual financial reporting in favor of semiannual results.

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