Press Release: 10/9/2025

The Rise of Public Equity Investment

 

Posted on October 7, 2025

By Brooke Thomson

President & CEO

The next big investor in your company or real estate development may be the government.

Investment by government in private businesses is not new but has typically come during moments of national crisis to shore up the financial system or protect supply chains. Recall that the US took equity positions in American International Group, General Motors and Chrysler, and took over Fannie Mae and Freddie Mac in the aftermath of the 2008 financial crisis.

But government from Washington to Boston has in recent months begun to use equity investments to achieve long-term policy objectives in areas ranging from housing to manufacturing.

Here in Massachusetts, a first-in-the-nation state revolving fund created by the Affordable Homes Act is making equity investments to support the development of mixed-income housing production. The idea behind the $50 million Momentum Fund is to blend public financing with privately financed equity and revolve over time, creating a permanent source for mixed-income housing growth.

“The Momentum Fund will help expand our state’s housing supply in a way that incentivizes the market to build housing for people of all income levels,” says Executive Office of Housing and Livable Communities Secretary Ed Augustus. “And the revolving nature of the fund ensures continued funds for future developments for years to come.”

On the federal level, the US government took a 10 percent stake in semiconductor manufacturer Intel as part of a deal converting $11.1 billion in grants from the CHIPS and Science Act into an ownership stake. The move was framed as a strategic effort to enhance U.S. semiconductor manufacturing and maintain a technological advantage over China.

The Trump administration is also reportedly considering a plan to use money from a $550 billion investment fund established as part of trade negotiations with Japan to invest in the development of semiconductors, pharmaceuticals, critical minerals, energy, ships and quantum computing.

All segments of the political spectrum seem to be getting in on the act. New York Democratic socialist mayoral candidate Zohran Mamdani famously supports city-owned grocery stores.

These investments mark a shift in U.S. policy, which for decades has provided grant and tax incentives to encourage private-sector activities but has generally avoided outright ownership stakes in private firms out of fear that it will reduce innovation and efficiency and encourage cronyism.

Both the state Momentum Fund and the federal manufacturing initiative have laudable goals, but public equity in private enterprise raises a host of potential issues – from the government’s role in corporate governance to the prospect of the public owning a controlling interest in companies that make national-security products.

Not everyone is a fan.

“…Broadly speaking I’m not a proponent of the government playing a bigger role” in the manufacturing sector, said Sen. Bill Hagerty (R., Tenn.), who has been consulting with Japanese financial institutions and the Trump administration on how to design the nascent infrastructure fund.

In any case, don’t be surprised if one of the shareholders at your next Annual Meeting is an elected official.