A raft of big tech IPOs have struggled recently, as investors apparently shun high priced, unprofitable companies. If you’d bought an equally weighted basket of Uber, Lyft, Spotify, and Peloton at IPO, you would’ve lost over 30% to date. And that’s before we even get to the kerfuffle of the failed WeWork IPO. Iain Fulton, Investment Director at Nikko Asset Management, believes the problem is a straightforward one.

“What we’ve seen over the last 10 years in the US IT sector is $1.4 trillion injected into the private equity market in tech companies alone. That’s the equivalent of the entire profit pool of the technology sector.”

It’s a story as old as markets themselves; large amounts of capital flow to sectors that are producing high returns, which pushes prices up, and therefore, future returns come down. Fulton expands on this story, and discusses what it would take for him to be attracted to these companies, in the video below.

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The stocks mentioned in this wire are for illustrative purposes only and are not a recommendation.