Accessing the $13 Trillion Private Markets Boom

Private capital markets, once dominated by institutions and the ultra-wealthy, are opening up to a broader range of investors with a more inclusive approach as modern share trading platforms take off, offering an alternative to subdued public markets.

The number of companies listed on the London Stock Exchange has slumped to its lowest on record, according to Bloomberg data. As of November 30, 2024, primary listings on the bourse had dropped more than 40% from their peak—and the trend isn’t limited to the UK, with IPOs and their proceeds both declining globally in recent years, too. Investors have responded to the slump in activity by seeking high-growth, pre-IPO companies, private equity and secondary shares.

The slowdown in IPOs has “created an environment where private markets are not just a complementary space for investment, but a necessity,” says Thomas Curran, Head of CapX from CMC, a fundraising platform for public companies and a marketplace that matches buyers and sellers of unlisted securities.

“There’s a shift towards freeing up these more exciting investment opportunities like IPOs and secondary placings, and giving people—that is, your average investor—the opportunity to participate, and not just the big guys,” he says. There is exclusive access to offerings that won’t be found anywhere else.

The opportunity is huge. Today’s global assets under management in private markets are estimated at over $13 trillion, and they are forecast to reach at least $21 trillion by 2029.

“If you’re looking at companies with revenues of over $100 million globally, 88% of them are private,” says Curran.

Why private markets are rising

For companies, staying private offers flexibility and the ability to grow without the pressures of quarterly earnings reports and public scrutiny. For investors, however, this has historically meant missing out on some of the fastest-growing firms—until now.

Technology is streamlining transactions, making private markets more accessible, and emerging platforms like CapX from CMC give retail investors access. In the UK, PISCES (Private Intermittent Securities and Capital Exchange System)—a private market initiative of the UK Treasury and the Financial Conduct Authority (FCA)—has been proposed, and the legislation will be introduced by May 2025.

“We think it’s a necessity to provide a solution for private companies in what’s really a fragmented space,” Curran says. “Both sides of our platform, both the public and private, offer a democratization of finance to some degree.”

Solving the liquidity problem

Alongside the need for broader access, private market platforms create much-needed liquidity. Early-stage employees or shareholders have often had no way to sell their shares until a company goes public or is acquired.

In these situations, “There’s no marketplace, no liquidity, and these are long-term investment scenarios,” Curran says. “Those investing have to be ready to stick with the position for potentially many, many years.”

Private shares can be bought and sold on CMC’s marketplace, the first of its kind in the UK. On the public side, it regularly notifies major UK investment services—such as AJ Bell and Interactive Investor—about fundraising opportunities, and these services then inform their retail clients. On the private side, shareholders can sell their company stock through the platform, which facilitates the transaction.

“If you were an employee at an early-stage company that wasn’t listed, and you had some shares, you could put your piece of stock up on our marketplace,” Curran says. “We could try and find a buyer for your shares and create liquidity for you.”

Over the past 19 months, CapX from CMC has orchestrated over 65 secondary market transactions in the UK, and investors have had access to private equity opportunities—including SpaceX and Klarna—that were previously unavailable.

Curran sees further potential in tokenization, which allows fractional ownership of assets.

“Through tokenization, we might be able to take a small segment of a real estate development, for example—any kind of asset class at all—and, through the platform, people could get access to a whole range of different investment opportunities,” he says.

Understanding the risks

Despite these advances, private markets lack live pricing and are harder to value than listed shares, making them inherently riskier. Investors must also be prepared for long lock-in periods.

Curran thinks transparency will improve as the market begins to open up. “Not many people are currently holding private investments—it’s all contained within a few VC funds,” he says. “But when they start to distribute these positions, price identification will start to improve.”

Regulators are also working to expand access while protecting investors, with the UK FCA proposing reforms that would see retail investors included in private fundraising rounds.

The knock-on effect for IPOs

The rise of private markets does not mean the end of IPOs, but rather a shift in how companies grow and investors participate.

“I don’t think this will deter IPOs, but it could keep those who are private satisfied with their existing shareholders for longer while they wait for the right time to IPO,” Curran says.

With the rise of platforms that blend public and private investments, private markets will no longer operate behind closed doors, and retail investors will have access to growth that was once reserved for institutions. This provides a marketplace for introducing buyers and sellers to a range of unlisted investment opportunities.

“Whether it’s discounted fundraises, IPOs, private stocks or even major blue chip private companies, we’re trying to distribute investment opportunities that are exciting to people and can offer them some diversification,” says Curran.

Whether this trend fulfills its promise—or creates new challenges for investors—remains to be seen.