Private Assets Are Coming to Your Portfolio… Be Ready

Motley Fool contributors Tyler Crowe, Lou Whiteman, and Jon Quast discuss:

• Accenture earnings surprise.
• New rules to make private assets available to everyone.
• Tips for investing in private assets vs. public equities.
• How much speculation is the right amount?

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A full transcript is below.

This podcast was recorded on Oct. 1, 2026.

Tyler Crowe: The SEC says private assets are all right. Motley Fool Hidden Gems Investing starts now. Welcome to Motley Fool Hidden Gems Investing. I'm your host, Tyler Crowe. Today, I'm joined by longtime Fool contributors, Jon Quast and Lou Whiteman. Guys, we're going to get into what has been a large theme so far in 2026, and that is bringing private assets, private capital, private equity to the masses, to the retail investors, to people like us. We're also going to jump into the mailbag, but we have to start today with the earning surprise numbers of the day, and that's Accenture. Shares are up about 19% as we're taping on better-than-expected earnings. Revenue and earnings both beat expectations and their fiscal guidance because this was the end of their fiscal 2026 year. They said fiscal 2027 came in also slightly higher than Wall Street expectations. This has been a company that's been on a slow glide path down recently. The question to me is what went right for a company that has been rather short on good news over the past couple of years.

Jon Quast: I'm sorry to be that guy, Tyler, but what went right was Accenture didn't die. It reminds me of this scene from the Monty Python movie years ago, where they're saying, bring out your dad, and they throw the guy on the wheelbarrow, and he says, I'm not dead yet. This is what that is. Accenture is not dead yet, but I wouldn't say that business is necessarily booming. You look at its fiscal 2026, which is what it just completed. Revenue in local currency, which I think that's a good metric since it is an international business, measuring that in the local currency, revenue only up 5% year over year. That's not exactly thriving. It's okay, but it's not anything that you're going to write home about. You look ahead to fiscal 2027, management only expects 3% to 6% growth. It could even decelerate further into the coming year. This isn't necessarily a great victory for Accenture, but it is still alive.

Lou Whiteman: You know what? Maybe that's enough because valuation matters here, and going into earnings, the stock had dipped below 10 times expected earnings. Just two years ago, they were up in the 30s. Jon, I don't think you're being that guy. I think, sometimes just announcing that, hey, the sky actually isn't falling, that is enough, at least in the near term. I think Jon summed it up well. They beat expectations. Expectations were dismal. If you look at what expectation, like, the way they guided down. But look, three months ago, there was a debate about whether or not Accenture can survive. These results help answer those questions. I don't know if it's a massive growth stock from here, but if it isn't going to zero, if there are signs that just, it's not going, then there is a reason to bounce off of a single-digit multiple, I think, and that's what we're seeing. Look, guys, if they're not going away, it's still only 14 times earnings today, which is still cheap, but that's, I think, the harder question from here.

Jon Quast: I think there are a couple of other things that signal that maybe it is a little bit stronger than what investors were giving it credit for. You look at the operating margin. Look at the non-GAAP because that does exclude some one-offs that were more favorable compared to last year. The operating margin did go up slightly year over year, so 15.8% operating margin. That's a very respectable margin and slightly better than last year. That is good. You also look at the cash that it's returning to shareholders. Basically returning all of the free cash flow to shareholders over the past year in the form of share repurchases and dividends, I suppose you could be glass half empty a guy and say, management is out of ideas and trying to solidify its shareholder base, but glass half full, it really does see its stock as an attractive value and it's putting its money where its mouth is by deploying that free cash flow into share repurchases.

Lou Whiteman: An Accenture has always been a cash return story. It has been for a long time. I'd be more nervous about that if this was a new change that might say they've run out of ideas, but yeah, this is what they do.

Tyler Crowe: Yeah, I was going to say, when you're a consulting company and all your assets are people, and your capital expenditures are on chairs and office equipment, you don't have to spend much to keep the lights on with a business like this. Now, this is the section we want to eat cro. We're going to go behind the curtain a little bit with some of our Motley Fool services, both on the hidden gems in the Rulebreakers teams. Past couple of months, we've either sold Accenture in real money portfolios or even put it on hold in some of our recommendation services. I'm wondering after seeing these results, if it's time to eat crow, I struggle whether this report was a trend or an aberration. To your point, 5% revenue growth is not much, but you compound that with good buybacks at a reasonable valuation. You can get to 7-10% earnings per share growth, and at the valuation that you have, that's not the most unattractive proposition when you think about it in the grand scheme of things.

Jon Quast: Well, let's be careful not to read too much into the market reaction from a single quarter. We could take a little stroll down memory lane to May of 2025, when The Trade Desk stock was up about 20% to about $70 per share, and one headline from that day read, Trade Desks, Koki platform fuel stunning rebound. We're down roughly 80% since then. A market reaction in a single day to a single quarter doesn't necessarily mean that everything is all clear. There are still some questions. AI is changing so many things out there, and I'd say that Accenture's business, there are still some questions that remain unanswered. I will say this, one thing that was extremely encouraging to me and that I would be very encouraged with if I were a shareholder of Accenture, Accenture says that 65% of new bookings came from outcome-based fixed price projects. Now, that is a very big thing. You look at the workloads that AI is replacing. They don't have fixed costs. I'll tell you that right now. It can be outcome-based, but oftentimes AI gets stuck in these loops, and it burns tokens needlessly, and it is really hard if you're trying to model what your expenses are going to be to get the outcome you want for the price that you're paying, you don't know with AI in many cases. To me, this is counter positioning for Accenture, saying, we can actually give you a price for the outcome that you want. That to me is huge, and it speaks in the numbers here. That is what its customers are signing up for.

Lou Whiteman: I can only speak hidden gems, and I certainly wasn't making those decisions, but we're all voices in the room, and I can tell you what I was thinking at the time, and I think it's still good questions for investors to ask. I never thought Accenture was going out of business. Some of these smaller consulting firms, I worry about. But again, the question is, will it be a good investment, a market beater from here? A couple of things to think about here. For one, their biggest expense is talent. This is, as Tyler says, a very asset-light business, but their product is their talent. For most of their history, they've competed for business school graduates against other MBA sources. Now they need coders, they need AI talent, and to some extent, I don't think they're really competing against Zuckerberg for those $150 million pay packages, but the cost of their raw material is going up. On the other side, they've always billed by the hour. As they work AI into their business, there's a case, at least, that if AI does what we hope it does, the hours needed go down, and so does that puts downward pressure on revenue? Couple that with the simple fact that, look, AI is democratizing coding. I don't think it eliminates the need for a partner in a lot of these big things, but is there even a subtle shift in what companies can do in-house versus hiring a consultant? Is that subtle shift the difference between being a market beater and just running the mill or keeping the lights on, but it's not a great growth story? I think those questions are still very much out there, and those would be how I would be thinking if I was going to buy this dip.

Tyler Crowe: There's like three or four industries, specifically, where the AI question is the biggest question out there. Some of them, you're like, yeah, maybe. It almost just feels like an obscure question at this point. But AI related to consulting in the Accenture, in the Gartner type of world, it is going to be one of the most challenging things for these businesses and the biggest question for investors going forward. It's definitely something we want to follow up on. Coming up after the break, we're going to talk about private markets.

There has been a gradual drumbeat over the past couple of years where private assets, private capital, private equity, private credit, however you want to carve it up, has been trying to become a part of the individual investors' choices versus just going into stocks, just going into bonds, real estate, however you want to carve it out. There has been proposals to allow private equity deals in 401(k)s. There's even been some think pieces lately on Wall Street opining for the days of pensions again because pension managers were more willing to take on private capital or private assets, and spicy things, I think, was the term that I saw relative to publicly traded things that we can put in our 401(k)s. Yesterday, there was some big news about this, and it's really important that investors think about this because there's going to be a lot of pressure from Wall Street in general, on getting private assets into people's portfolios. There were some new SEC rules, and there were three core ones, and we're going to go through them, guys, and what you think is the good, the bad, or how these carve out. But there was basically three of them. One of them is that they have up the upper limit of a performance fee that a registered investment advisor can get, I think it's gone up to something like 20%, which is more or less par for the course for that two and 20 hedge fund fee structure that we normally see at hedge funds mutual funds of days of your, things like that. The other one was there are going to be new ways to become an accredited investor. Instead of just being how much money you have or how much money income you're making, they want to look at some professional licenses as a way to show competence to be an accredited investor. The last one is giving more flexibility to private funds, for redemptions related to not having to give out so many on a certain quarter, giving them a little bit more flexibility there. These rules to me seem a lot like incenting Wall Street to go out of their way to bring retail investors to the fore here. I have some thoughts, but I want to get you guys' as well. Looking at all of these things, are these proposals net benefits to individual investors, or is this a pro-business, pro-Wall Street move?

Jon Quast: Look, Tyler, this isn't really my wheelhouse to say whether or not it's a net benefit for your regular Joe or for the financial professionals out there. What I will say, I'm 100% in favor of changing the rules here from going from a wealth-based system to a knowledge-based system. That to me makes a ton of sense. Now, maybe it's my political leanings, where I don't want Washington telling me what to do. I'll collect my own rainwater, thank you. But I think what we talk about a lot on this show is that finances are personal. There are a number of reasons why somebody's bank account might not meet the threshold that the government requires to be able to invest in these private companies, and those individual reasons matter. You can have, in theory, someone who is quite wealthy for a variety of reasons and quite ignorant, who is allowed to do these things, and it's going to be to their harm, and vice versa. You can have someone whose bank account doesn't quite measure up, but really, they are a sharp cookie, and they should be able to grow their wealth by investing in a variety of other options that aren't available to them today. I'm in favor of changing these rules. If someone can demonstrate the competency to be able to invest in these companies, they should be allowed. That's my view.

Lou Whiteman: I don't disagree with any of that. I still think this is very much a pro-Wall Street. Look, the good news is people who know what they're doing will get a chance. The bad news is that human beings are very bad at assessing their own competence. So there is going to be a lot of pain here. I don't want to be full-on cynical and say this is a private markets bailout, but it does feel like the net effect is going to be just adding to the number of bags that are available to fill at the bottom of these things. Everything is going to be marketed on the Chance to get into SpaceX or OpenAI. But remember, for every one of those, there's at least a Theranos or a WeWork. Guess which one retail is going to get, especially in these funds where the managers are allocating for it. Yes, Jon is right. The old rules are outdated and need modernizing, but I think that there's a lot of harm coming here of saying that, look, private capital is growing, we need more capital to fund it. Hey, I know a big pot of money that you guys would probably like. That's what's going on here, and I think, just be careful out there.

Tyler Crowe: I can certainly sympathize with that more money into the private capital, and that's where the growth is. One of my frustrations recently as a publicly traded stock investor is how long it's taking for those OpenAI and SpaceX companies to go public. We hear things now like series M funding rounds, 12, 13 private funding rounds. We haven't seen this in decades. We're going to contrast that with the companies that we use as the great examples of wealth creation for individual investors, the Amazons, the Netflixs, even Tesla. They were able for individual investors like us to create wealth because they went public at minuscule market caps relative to what they are today. Whereas you have the SpaceX and the ALFs are all going public at multi-trillion dollar valuations. Public stock investors aren't getting these opportunities to watch this thing grow up in the public markets. They're just, to lose point, just giving the exit liquidity for the 15 private investors before them. I really hate this dynamic. I get why it's happening. More and more money is rushing into private capital. I don't think there's any going back, unfortunately. It's not like we're going to reclaim all these companies back into the public markets. What I would like to see, though, is if these changes means like the Andreessen Horowitz of the world will actually build funds that bring retail investors along. I think I can tentatively get on board because without it, we're all just going to be stuck. Hey, do you want this thing, at a valuation of $5 trillion, because we've already had 17 funding rounds? That seems much less appealing. The private markets are a harder place to invest for a myriad of reasons. Like you said, Lou, some of the things are a little bit more opaque. As you guys are thinking about this, what are some advice, and I'll go to you first, Lou. What advice you give to investors looking at private assets, perhaps for the first time?

Lou Whiteman: Two points on what you said, and I think they both relate to the advice. For one, Jon, I hate to do this to you, but in this world, we need more regulation, not yet, less, because my fear is that it's not going to be let's make a fund of all these things. Let's give our limited partners that we have long-term relationships with, and we're trying to recruit future millions from. Let's give them the good deals and give retail the rest. I think we need some way to stop that. Secondly, this is the old man on the lawn here, but, yes, we miss out on the mega gains, and I love the mega gains. But arguably, we're also shielded from a lot of risk not getting in that early because for every Amazon, again, there are a lot of companies that didn't become that. I am not convinced that for the average investor, it isn't better to not have access to early-stage companies, but to just focus on solid 10% to 15% a year over time companies. If you do want to get involved here, just be careful what you buy. Just look carefully if it's a fund, how this fund is being allocated. If it's individual deals, look at it on a deal-by-deal basis. I hate to be so cynical, but I just don't think it's going to be the non-whales that are getting the best deals here.

Jon Quast: The only thing I'd add to that, Lou is with a private deal. If we do wind up in that place where you are listening to the show and you're allowed to invest in a company that is still a small private company, remember that disclosure rules are different. You don't have all of the information that you have with a publicly traded company, and that is incredibly important. We are at the end of the day, business evaluators. We are buying businessesm we are not buying tickers, and you have less information to evaluate the quality of a business with a private company, and so keep that in consideration when you're moving in this space.

Tyler Crowe: I do want to add one extra layer to what Jon was mentioning there, too, because not only is it slightly more opaque, one of the things that's also very important with private assets is the term sheet. That's something we don't really talk about with publicly traded stocks because the ownership of publicly traded stocks is pretty established, pretty well regulated. The terms are pretty well set. You buy them on a brokerage. If you're buying private assets, they'd often come with terms that can be good or detrimental to who you are as the investor. They can be much more bespoke than what we see in publicly traded equities so might be willing to pull out a pencil and do a little bit more extra due diligence on term sheets than you normally would with publicly traded equities. Coming up after the break, we're going to hit the mailbag.

Hey, everyone, if you want your email read on air, email us at podcasts@fool.com. That's podcasts with an S. I've also left the email in the show description. Today's question comes from Barry and says, hi, team love the podcast. Took up investing about six years ago and wandered on a lot on advice of sticking to 20-30 stocks. Would you consider this more of your core holdings of where 90% of your portfolio, and then allow 5%-10% to be more speculative stocks, maybe even crypto. We just had a conversation about private assets, the spicier things, I guess, if you will. I've had some small speculative items over the years and have made significant gains into my top eight holdings. That would have helped me a lot towards beating the market. Thanks again, Barry. Guys, when we think about portfolio construction, obviously, as we say, we cannot give personalized advice here, so we're not going to be speaking directly to your portfolio, Barry. But one of the things we can do is, guys, when you think about your portfolios personally, how much do you allocate to the spicy stuff, the speculative stocks, the crypto, the micro caps, maybe even a couple of private assets or two.

Jon Quast: Well, as far as the spicy stuff, I got into gestion during the 2020, 2021 stock rally. I actually had some spicier investments that went to zero, and I think that cured me a little bit from taking on too much speculation. It's very low in my portfolio. Maybe only one or two positions, I would say, this is a home run or nothing deal. But to the point with the question on 20-30 stocks, if that is coming from perhaps Motley Fool literature, remember that is generalized advice, and the advice was always at least 25. That does not preclude having part of the portfolio that was for maybe 5%, 10%, as you point out, maybe for a little bit more speculation, where the vast majority of the portfolio is upheld with maybe 20, 30 core positions. Now, I will say that our co-founder, Tom Gardner, has actually revised even higher recently, saying, maybe you want to get to at least 50 stocks in your portfolio as a way to diversify.

The thinking behind that is that things are being disrupted so quickly that it's even harder to be able to tell which stocks are going to be the best performers over the next 5-10 years, and so you want to diversify more, not less. Now, that is always talking about the core. We're trying as a minimum diversification goal, but that does not preclude, as you point out, having some parts of your portfolio, maybe you're putting it towards crypto, maybe it's private investment. I don't know what your case may be. Your mileage may vary, but yeah, a bare minimum, this is what we're trying to get to. Now, I will say for me personally, I diversify in the buying, but perhaps I concentrate in the holding because statistics tell us that actually a fairly small percentage of stocks wind up being your big time winners, and really, you want to hold onto those as much as you can, as much as you still see a bright future ahead. I'm pretty concentrated at the top, but I diversify as I'm building out that larger position in stocks on the bottom. I just let the winners rise and allow that to take its place.

Lou Whiteman: There's no one-size answer here, but I'm Team Barry. I get what you're saying, Barry. I have a core group of about 20 stocks that are boring and reliable at the top of my portfolio, and they should honestly be enough to retire on. Then I have about 50 or 60 stocks that are just smaller positions that are just rampant speculation in some regards. If you can stomach that and you have the core taken care of, so you're not putting your retirement at risk or long-term plans at risk, I personally have no problem with what you're talking about.

Tyler Crowe: We get into these conversations a lot over time, and we get a lot of questions about how to allocate portfolios, how much to speculative stuff, how much to nano caps, how much to, the big trends or how much do I allot in cash at any given moment. As much as we say we want to give the registered investment advisor or the textbook, CPA answer to these, a lot of these things are very emotional decisions because we're handling our personal money. It's not like we are all money managers. A lot of this comes down to what you, as an investor, are comfortable with, what works for you. Lou's portfolio is very different from mine. I tend to take less speculative positions. I like to be a little bit more of a batting average guy than a slugging percentage guy. Things like this are going to change, and what matters more than anything else is what works for you. I know that sometimes seem a little unsatisfying, but the nice thing about investing is over the years and years, you will hone that skill. You not only will you become a better investor, but you'll also learn what you are good at versus what you're bad at. These things will be reflected in your portfolio.

As always, people on the program may have interest in the stocks they talk about, and the Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. All personal finance content follows Motley Fool editorial standards, and it's not approved by advertisers. Advertisements are sponsored content and provide for informational purposes only. To see our full advertising disclosure, please check out our show notes. Thanks for producer Dan Boyd and the rest of the Motley Fool team for Jon, Lou, and myself, thanks for listening, and we'll chat again soon.

Jon Quast has no position in any of the stocks mentioned. Lou Whiteman has positions in Accenture Plc and The Trade Desk. Tyler Crowe has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Accenture Plc, Amazon, Netflix, Tesla, and The Trade Desk. The Motley Fool recommends Gartner and recommends the following options: long January 2028 $260 calls on Accenture Plc and short January 2028 $280 calls on Accenture Plc. The Motley Fool has a disclosure policy.