This has been facilitated by the rise of electronic marketplaces allowing issuers, brokers, employees, and early-round investors to buy and sell shares. This confirms that private markets are developing market infrastructure for price discovery and trading in private shares, similar to that of stock exchanges.
Likewise, the inability of venues such as Aim to provide deep and continuous liquidity has reduced their value to many firms.
Change is coming
Private capital markets are finally beginning to swap manual processes for automated workflows and rapid execution, making them more efficient than ever before.
With private capital markets’ AUM projected to hit $30tn by 2030, this will only accelerate as more players move into the space.
This shift is already well underway, with giant pension funds such as the California Public Employees' Retirement System (Calpers) vastly increasing their private markets allocations to take advantage of strong growth numbers.
Although private markets are yet to match the efficiency levels seen in public markets, the gap is being narrowed, bolstering growth and making these investment opportunities more accessible than ever.
Myles Milston is co-founder and chief executive of Globacap
