- Over the last 15 years, private markets have grown into a thriving parallel financial ecosystem, fueling diverse economic sectors and outperforming public markets.
- Despite the opportunity, individuals — and sophisticated financial advisors — face major barriers to investing in private markets, which remain opaque, complex, illiquid, and require long-term commitments.
- A wave of innovation is changing that. New technology platforms are simplifying access, bringing us closer to a future where investing in private securities and other alternative assets is as easy and transparent as trading a stock or ETF.
KEY INSIGHTS:
The US stock markets are powerful bellwethers for economic sentiment. Movements in the S&P 500 and Nasdaq Composite ripple across global markets, shaping investor behavior and consumer confidence.
But here’s a lesser-known fact: Despite their visibility and influence, public markets are only a fraction of the broader financial landscape.
Most US companies are privately held. Among those with over $100 million in revenue, 87% are not publicly traded, and it’s even higher in Europe and Asia. Innovative market leaders like SpaceX, OpenAI, Anthropic, Anduril, and Stripe fuel their growth with capital raised exclusively from private markets. So attractive is this route that the number of publicly listed US companies plummeted from 7,300 in the mid-1990s to just 4,300 today.
“Raising capital in the private markets has become such an attractive option that the number of publicly listed US companies has plummeted from 7,300 in the mid-1990s to just 4,300 today.”
Private markets have also become the dominant funding mechanism for our generation’s most crucial investment trends — from data center infrastructure for cloud computing, and foundational models underpinning the AI revolution, to innovations like wind farms, large-scale batteries, and next-gen nuclear power accelerating the clean energy transition.
In total, private investments (also called alternatives) are projected to reach $29 trillion in assets under management (AUM) by 2029, up from nearly $17 trillion at the end of 2023 — a 9.7% annualized growth rate. These figures include private equity, credit, hedge funds, venture capital, infrastructure, and real estate. Once a niche segment of finance, private markets are now a significant engine powering innovation and wealth creation globally.
From elite to everyone
Historically, alternatives were reserved for large institutions like pension funds and university endowments. David Swensen, the former chief investment officer for Yale University, famously grew the university’s endowment from $1.3B in 1985 to $42.3B in 2021 with a 13.7% annual return.
Now, that once-elite strategy is becoming a more accessible investment approach. In his 2025 annual letter, Blackrock CEO Larry Fink praised the advantages of alternatives, encouraging investors to shift from the classic 60/40 portfolio to a 50/30/20 split, with 20% allocated to alternatives (versus 5% today). Such a shift could offer better inflation protection and higher returns. From 2002–2022 private equity returned nearly 15% annually versus 9% for the S&P 500.
Current SEC rules require individuals investing in alternatives to be “accredited,” with $1M in investable assets (excluding a primary residence value) or annual incomes above $200K ($300K+ for couples). But that too is changing. Empower, one of the largest 401(k) plan providers in the US, recently announced it will begin offering private market investments.
An administrative nightmare
Despite being the fastest-growing asset class, the private investing experience remains painful — largely due to fund reporting. Every private equity, venture capital, and real estate fund reports via a different portal with inconsistent formats. The average fund sends around 14 communications annually that require processing: capital calls to be funded, distributions to be confirmed, K-1s to be sent to tax professionals, performance statements necessary to value investments. Yet none of it is easily accessible digitally with modern tools like APIs.
For investors and advisors, this is a daily headache: monitoring email inboxes, logging into dozens (if not hundreds) of portals, downloading documents, manually extracting and entering key data points into various systems, filing documents, and taking appropriate actions based on document type. No wonder administrative work eats up 40% of investment advisory firm staff time — time that could be spent making better financial decisions for clients.
“No wonder administrative work eats up 40% of investment advisory firm staff time.”
Private capital is also far less transparent. While public markets are highly accessible — anyone with internet access can buy and sell or see pricing and performance data — valuations for alternatives are determined by the firms that manage the assets, which are bundled in large funds. Liquidity is also limited — lockup periods easily five years, and minimums starting at $250K.
We believe it doesn’t have to be this way. With public markets increasingly volatile and much of the economy now private, it should be easy for more people to diversify into alternatives.
Making alternatives easier
At Arch, we think investing in private markets should feel as seamless as trading public stocks and ETFs. That’s why we built a platform that makes it simple for investors to track, manage, and understand their alternatives.
“At Arch, we think investing in private markets should feel as seamless as trading public stocks and ETFs.”
Our platform gives investors a unified view of all their private holdings — from performance and valuations to capital calls and underlying assets. Arch streamlines painful back-office tasks by automating the work of logging into portals, extracting data from documents, and managing capital call workflows. We also provide an end-to-end tax solution, including an up-to-date tracker for tax documents, and automatically reach out to asset managers for missing K-1s.
While boosting productivity, we enable better planning opportunities and smarter decision-making by giving investors on-demand access to real-time performance metrics and portfolio insights, leveraging artificial intelligence to more easily understand financial updates.
Although our software does the work of ingesting and structuring information from thousands of disparate sources, truly making private markets as seamless as public requires broad adoption of digital data standards. This would unlock faster insights, greater transparency, and access.
Platforms like iCapital, CAIS, Opto, and GlasFunds help improve access too, by pooling individual investors to lower minimums. In time, these platforms may even enable secondary trading, solving for private capital’s liquidity challenges.
Investors also need familiar benchmarks — comparable metrics like P/E ratios, Morningstar-style fund ratings, and Moody’s credit scores — and better education to bridge gaps across asset types like mezzanine debt or asset-backed lending.
Investing in the future of the global economy
The transformation of private markets is not only an evolution, but a fundamental reimagining of how investing works. Just as Charles Schwab revolutionized retail investing by creating a comprehensive platform that democratized access to public markets, the future of alternatives lies in creating a unified way to manage and optimize an entire private portfolio.
At a time when public market gains are increasingly concentrated in a few tech giants, broadening access to private capital offers individual investors a smarter way to diversify, build wealth, and help fuel the next wave of global innovation.
