Panel
Private Markets Reimagined | Global Conference 2025
Milken InstituteYup S. Kim, Bennett Goodman, Jacob Kotzubei, Meranda Ling Miao, Donna Milrod, Yann Robard
- The share of global private markets in global equity capitalization is projected to increase from the current 8-10% to a potential 25-35% within 50 years, driven by a predicted shift of capital from public to private structures and growth from $5 trillion to $15 trillion.
- Private equity is forecast to consistently outperform public markets over long to medium-term horizons, citing historical data where private equity outperformed in 97 of the last 100 quarters, with expectations of healthy outperformance of 300 to 500 basis points and top quartile net returns exceeding 20%.
- Tokenization and fractional share classes are expected to enable broader participation, real-time secondary markets, and seamless portfolio rebalancing, potentially evolving the secondary market into a "public market of private equity" that injects liquidity while preserving long-term alignment.
- AI and robotic automation are anticipated to solve data transparency and valuation issues, allowing general partners (GPs) to focus on value creation and enabling new private exchanges, while basic skill commoditization may necessitate GPs hiring for high emotional intelligence to generate alpha.
- Deal flow quality is currently rated "A plus" with high operational alpha available despite a reduced volume of transactions, and median returns are expected to stabilize in the low teens while remaining resilient against high interest rates historically considered low.
- Alternative liquidity vehicles such as continuation vehicles and NAV loans are projected to grow until regular sale markets function normally, with structural alignment expected to improve through requirements like GPs rolling 100% of carry and injecting new cash.
- Product innovations including semi-liquid products, ETF wrappers, and holistic portfolio solutions are expected to democratize access, though advisor education and regulatory frameworks are anticipated to lag behind the pace of technological distribution and investor protection needs.
- Public markets are characterized as broken due to computer trading dominance and quarterly earnings focus, whereas private markets with concentrated, aligned shareholders are positioned to build better businesses over the next three to five years with volatility less than half that of public markets.
- Private markets are not viewed as posing systemic risk to the financial system because losses are absorbed by well-capitalized institutions like sovereign wealth funds and pension plans without SIFI-like cross-collateralized structures.
- Future industry risks include potential misalignment between GPs and LPs driven by platform consolidation and crowded capital, the misuse of NAV loans or continuation vehicles that could damage industry reputation, and the possibility of consolidation failures among new entrants.
- Market evolution will require GPs to align with the "investor mindset" as public asset managers face disconnects between fee-based investors and carry-based LPs, while Fintech will drive standardization of data to handle massive investor bases beyond traditional club deals.