Main Street funds in pursuit of unicorns

WITH Uber now reportedly valued at US$50 billion, there are justifiable worries that some private startup technology companies worth US$1 billion or more - known as unicorns - are in bubble territory.

But don't worry, the thinking goes. Main Street investors won't get hurt as they did after the dot-com collapse of 2000 because the current crop of highfliers are privately held by expert investors like venture capitalists. So most civilians will be fine should things turn south this time.

Here's an open secret: That's fiction. While public investors and 401(k) contributors have long complained that they can't get access to shares of hot technology companies before their initial public offerings, that's actually not the case anymore. Fidelity, T Rowe Price, BlackRock and Janus, among others, have been quietly putting shares of private companies like Uber, Pinterest and SpaceX into their investment funds, hoping to lift the returns of certain mutual funds.