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Private assets

Public and private equity, the new paradigm

October 08, 2026 - 5 min
Professional businessman portrait in modern office
In brief:
  • The public-private divide: A structural migration is redefining capital markets. While US exchanges attract high-growth tech firms with premium valuations, mid-market companies are increasingly staying private or de-listing to escape public market constraints.
  • The shift in corporate lifecycles: The average age of a pioneering company at IPO has nearly doubled to over 11 years in the US1, with similar trends observed across the globe. As a result, the primary phases of corporate growth and value creation that used to be captured by vanilla retail investors through listed markets have been transferred to the private sphere.
  • The need for a dual-engine portfolio: To capture genuine economic growth, contemporary asset allocation must move past traditional liquid-illiquid silos. Success now requires a unified approach that captures value across a seamless public-to-private continuum.

The apparent stability in IPOs hides the expansion of private equity

For decades, the stock market ticker was the ultimate scorecard of economic health and corporate ambition. An Initial Public Offering (IPO) was the moment a business entered maturity, offering retail and institutional investors alike a chance to participate in its growth.

Today, this lifecycle is not the only path anymore.

If you take a helicopter view, on a global basis, IPO levels are relatively stable, with annual variation in line with historical highs and lows (except for 2021 which was a catch up from the 2020 lockdown historical low). However, these levels are skewed toward US Tech companies’ listings and large IPOs, which distort the picture and hide the long-term reallocation move towards private equity.

For instance, the US has seen high-ceiling IPOs such as social media platform Reddit and landmark listings like aerospace leader SpaceX capture massive public valuations, thereby maintaining IPO numbers within historical ranges.

Recent IPOs include a couple of larger, more mature firms that have stayed private for longer, using that time to build up their market strength and long-term infrastructure. This trend is best illustrated by OpenAI that has redefined the investment landscape by raising tens of billions of dollars directly from private markets.

In other words, IPO volumes are sustained by mega-listings made possible by the expansion of private equity’s business cycle, with private equity now being able to finance ever larger firms, down the maturity path.

What makes such change possible and potentially attractive to companies?

An increasing number of companies are choosing to delay their public debuts, preferring to mature entirely within the private sphere. According to historical tracking by the Center for Research in Security Prices (CRSP) at the University of Chicago, the average age of a tech company at its IPO has nearly doubled over the last two decades, lengthening from roughly 5.5 years in the early 2000s to over 11 years as of 20252. This extended gestation period means that most of its early-stage value creation now occurs long before a public stock symbol is ever registered.

This fundamental alteration of corporate timelines is made possible by a private capital ecosystem that has greatly matured both on the private equity and private debt sides. On the debt side, the rise of a sophisticated private debt market, which now comfortably exceeds $1.9 trillion globally, means companies no longer need to issue public bonds to secure access to leverage [2].

The larger base of investors for private equity funds fosters the emergence of mega private equity funds, able to keep investing for longer with significant capital. For institutional investors, private equity funds have become an almost traditional asset class given their four decades of existence. Structural innovations such as continuation funds, the secondary market for shares of private equity funds, or funds of co-investments also make their access possible through different channels and formats.

Finally, regulatory changes now make it available to a new investor base, with changes such as the relief of some regulatory burdens and litigation risk for 401(k) plans (US pension plans) or the regulatory push toward private assets in Europe with ELTIF funds (European Long-Term Investment Funds).

From a pure corporate perspective, remaining private allows companies’ management teams to focus on five-to-seven-year strategic horizons, under a private governance framework. An obvious example of that is OpenAI, mentioned above, but it can also be illustrated by companies being taken private, with, for instance, the delisting of Hargreaves Lansdown, a UK-based investment platform (led by CVC Capital Partners) or the de-listing of Swiss banking software giant Temenos (led by KKR).

A dual-engine approach for modern portfolios

For asset allocators, this structural shift is not a simple choice between public and private markets. Instead, it redefines how public and private assets should coexist in a diversified portfolio. Rather than competing, public and private markets are increasingly acting as two halves of a single economic engine.

To capture the core of the economy, public equities remain the most efficient instrument. Public markets offer immediate liquidity, regular dividends, and a reliable way to enter or exit large stock positions even during periods of macroeconomic uncertainty.

To capture high-conviction alpha and early-stage innovation, however, private assets have now become more adequate. Because companies choose to stay private during their most rapid growth phases, public markets are increasingly dominated by mature businesses with less growth potential. A portfolio locked exclusively in the listed space risks missing one of the primary engines of economic value creation, which is innovation.

Institutional investors have intensified their shift towards private assets diversification after the Great Financial Crisis to compensate for lasting low rates. The emergence of a “credit continuum”, particularly for pension funds and insurers, illustrates the revolution where private debt became a full part of portfolio allocation.

High net worth individuals followed the trend a decade ago, in particular for private equity funds. Other retail and individual investors are just starting to catch up with this opportunity, thanks to technological (neobanks, digitalisation…) and regulatory changes such as ELTIF funds and/or the expansion of evergreen retail funds (allowing for more flexibility).

Navigating the seamless equity continuum

As the boundary between public and private markets grows porous, traditional silos are less relevant. In practice, a portfolio construction that would not invest in private equity would create a selection bias, which would deprive it of some of the most innovative and high growth equity exposure. Similarly, a portfolio construction only based on private equity would lack reactivity and flexibility. Portfolio construction must therefore adapt to this new paradigm where value creation and business maturity is not entirely determined by a listed or unlisted status.

Despite growing porous, listed markets and private markets still have their own technicalities. Specialised managers are still required when it comes to line-by-line selection as the expertise is still quite different. In this context, mixing listed equity funds and private equity funds as part of a holistic allocation is a simple way to optimise resources and risk/return. Fund allocators or funds of funds can also help here.

In conclusion, the long-term performance no longer lies in choosing one market over the other, but in building a portfolio that captures value across the entire corporate lifecycle, whether listed or not.

Read important disclosures

Sources:

1 Center for Research in Security Prices (CRSP) & Jay R. Ritter, IPO Database, tracking company age at listing, data consolidated through late 2025.

2 Preqin, Global Private Debt Report, late 2025 / early 2026 data.

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