Funds jostle for tech private equity

THE retirement accounts of millions of Americans have long contained shares of stalwart companies like General Electric, Ford and Coca-Cola. Today, they are likely to include riskier private stocks from Silicon Valley startups like Uber, Airbnb and Pinterest.

Big money managers including Fidelity Investments, T Rowe Price and BlackRock have all struck deals worth billions of dollars to acquire shares of these private companies that are then pooled into mutual funds that go into the 401(k)s and individual retirement accounts of many Americans. With private tech companies growing faster than companies on the stock market, the money managers are aiming to get a piece of the action.

Fidelity's Contrafund includes US$204 million in Pinterest shares, US$162 million in Uber shares, and US$24 million in Airbnb shares. Overall, there were 29 deals last year in which a mutual fund bought into a private company, and they were worth a collective US$4.7 billion, according to CB Insights. That was up from six such deals, worth a combined US$296 million, in 2012. T Rowe Price was the most active big investor, making 17 investments in private tech companies.