Rowan says public and private markets will converge across issuers, ratings, sizes, and liquidity.
“That it won't be different issuers. It won't be different ratings. It won't be different sizes, and it won't even be different liquidity.”
Rowan states that selling an investment grade public corporate bond now takes five days due to liquidity issues.
“By recent measures, it would take you five days to sell an investment grade public corporate bond today because there is no liquidity.”
Rowan predicts that within a year, public and private markets will become indistinguishable from each other.
“I will predict that a year from now, you will not be able to tell the difference between public and private.”
Rowan states that trading capital in fixed income markets has declined to just 10% of 2008 levels.
“We're just finding out, for instance, that there's no liquidity in fixed income markets. That trading capital in the world is 10% today of what it was in 2008.”
Rowan argues the boundary between public and private markets is currently in transition.
“We don't think of them as private anymore. This notion of what's public and what's private, I think, is in transition.”