The Future of Private Markets

Abstract

Asset owners derive little benefit from the continuous trading of capital claims offered by public markets, and the number of listed companies is decreasing. However, private markets are not as efficient and delegating investment management in private markets is challenging due to inherently strong agency conflicts, and minimal regulatory protection. Insourcing private market investment capacities is a solution (a.k.a. the Canadian model), but it presents some often overlooked challenges. Alternative solutions include private market platforms controlled by multiple asset owners.

Keywords: private equity, corporate governance, regulation, private markets