As President Donald Trump’s trade tariffs raise expectations of a U.S. recession , one venture capital chief says “bring it on.” The biggest risk for investors right now is uncertainty, according to Mitchell Green, founder and CEO of Leap Edge Capital, which has stakes in several U.S. and international blue-chip companies. But he said this uncertainty — and a potential market downturn — presents opportunities for investors like him. “We’ll buy old LPs [limited partners] out of funds, but we embrace a recession. We’re not afraid of a recession. It’s the best time to invest,” Green told CNBC’s Access Middle East Thursday. Limited partners are institutional funds — for example, pension funds, sovereign wealth funds or hedge funds — that put money into venture funds. “Fortunes are made during recessions, if you have capital. And so … in the secondary world, especially, where we buy a lot of things, you want to be a buyer when others are forced sellers. That is when you can make an absolute ton of money.” Secondary markets in the VC world allow investors to buy and sell previously purchased stakes in venture-backed private companies. In primary markets, companies raise fresh capital by issuing new shares — secondary markets, by contrast, enable existing investors to offload assets in their portfolio to new buyers. ‘Forced sellers’ During economic downturns, VCs are often forced to sell their stakes in certain companies to generate cash — sometimes at a discount from when they initially bought them. For first-time investors, this can offer a potentially attractive entry point, particularly when it comes to late-stage companies which might, in some cases, have seen their valuations balloon to eye-watering sums. “If we get a recession, bring it on. We’ll find really interesting opportunities,” Green said. “And I think, in a world where LPs and GPs [general partners] were already looking for liquidity, now you have an IPO market that’s probably going to slow down … A lot of LPs, especially endowments and foundations in North America, were already over-allocated to a lot of private equity, and this is only going to extend it.” “And so a lot of those people could become forced sellers. If they become forced sellers, that’s like, amazing for businesses like ours and other people that can take advantage of it,” he added. Leap Edge Capital has $5 billion in assets under management and describes itself as a growth equity firm that invests in software, internet, and tech businesses. It has stakes in companies including Spotify , Bumble and Uber , and invests heavily in Chinese tech firms including ByteDance, Alibaba , and Ant Group. Bullish on China, ByteDance Green is also bullish on China, despite the country’s economic slowdown and major challenges ahead due to the Trump administration’s tariffs. China “is going to be a much bigger economy in 20 years than it is today,” he said, arguing that the world’s second-biggest economy remains investable. Leap Edge will also maintain its investment in Chinese tech giant ByteDance regardless of whether its social media app TikTok is banned in the U.S , he added. “The U.S. business of Tiktok, which I think a lot of people don’t understand, could go to zero, and it does not change one iota of our investment thesis,” Green said of his firm’s ByteDance investment. “We actually, in our base case models, assumed the U.S. business was shut down. We think we can make a great return just with the Chinese and the rest of the world’s business. It’s a monster company run by a phenomenal management team with huge tailwinds behind it.”
