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We Need to 80x Private Market Transactions
Here are the numbers. Plus: infra moves from Apollo, iCapital, HarbourVest and CAIS... Your 5 min lens on private markets is here →
Good morning.
Last week's Executive Order allows alternatives in 401(k)s… but democratization will break private markets unless we fix their infrastructure first.
In this edition of The Brief:
The 80x challenge ahead
Why model portfolios change everything
Infra moves from CAIS, iCapital, GeoWealth, and HarbourVest
Overheard: AI agents, financing gaps, and administrative burdens
Here's what's happening:
THE HARD NUMBERS
Democratization will break private markets.
Unless we fix this:
Last week's White House Executive Order ended the decades-long ban on alternatives in 401(k)s.
It directs regulators to dismantle the Department of Labor’s guidance that has kept 90 million defined-contribution accounts, with over $9 trillion in assets, locked out of private equity, credit, real estate, and infrastructure.
The headlines focus on "access." The real story is scale.
Even a modest 2-3% allocation from the DC system means tens of billions in new capital annually. If allocations rise to 20% or more, as many predict, flows could exceed $1 trillion in just three years.
And there is an even bigger story
DC access coincides with private markets entering managed account platforms, the technology that lets advisors customize portfolios - often through model portfolios - for millions of individual clients. These platforms control $15T in assets. Combined with the newly accessible 401(k) market, private markets now face a $24T addressable market expansion.
Unlike individual investment decisions, these hybrid portfolios with pre-set asset allocation will combine public and private assets in a single portfolio, that thousands or millions of accounts follow systematically. When the model changes, such as adding a 5% allocation to private credit, every linked account rebalances instantly. What was once hundreds of brokerage trades per day across the industry becomes hundreds of thousands in a single overnight event.
To understand the scale: on a volatile day in public markets, a single model portfolio change might trigger hundreds of thousands of automated rebalancing transactions across a major platform.
Now imagine adding private credit allocations to those same model portfolios. Every rebalancing event becomes a flood of subscription documents hitting infrastructure built for manual processing
In other words: $24T in new private market transactions won’t be driven by individual investors placing brokerage trades one at a time.
They’ll be driven by model portfolios, the operating system of modern wealth management.
WE NEED TO 80X
For context: rough math suggests iCapital and CAIS have processed about $300B in private markets between them over the last 13 years.
Access works at the current scale, and those platforms have done amazing work.
But the numbers above illustrate: building $24T in private markets access isn't a scaling challenge.
It’s an infrastructure rethink.
The infrastructure reality
I’ve been chatting to Andrew Tarver, InvestCloud's Private Markets Network president, who sees the operational reality clearly and is part of the team working on solutions.
He provided some numbers on what they’re seeing and the near-term scale challenge ahead:
With over 4 million active models and $3.3T of assets on InvestCloud's platform alone, a 10% private markets allocation triggers 1-2 million buy orders and millions of subscription documents.
Most of today’s GP operations teams handle 800-2,000 subscription events monthly.
At managed account scale, this becomes hundreds of thousands per month - requiring tens of thousands of new FTEs without automation. Obviously not workable.
Where private markets could break
This is where private markets will break for many - not at the investment level but in the infrastructure:
Onboarding: Scaling from thousands of institutional accounts to millions of retirement accounts.
Processing: Moving beyond spreadsheets and email for trade execution and reconciliation.
Product design: Rebuilding funds for model portfolios and immediate deployment windows.
InvestCloud is both building technology as well as orchestrating a coalition of asset managers, wealth platforms, and custodians to create the processing architecture this scale demands.
Their intention is to make this new infrastructure available to every managed account platform to access through a consortium ownership model.
As Tarver told me:
"This is capital markets from the 1970s, where NYSE remained closed on Wednesdays to allow brokers to catch up with paper ticket backlogs. This is akin to private markets and sub-docs today. We now have the opportunity to trade private markets through wealth and retirement channels, but we cannot process private markets at scale. This is the priority. This is existential to private markets in managed accounts and retirement channels. Get this right, we change the industry, we democratize private markets. Get it wrong, we will be throttling volumes for the next 3-5 years and creating a terrible investor and advisor experience."
The Stakes
Without this kind of autobahn-grade plumbing, the EO's promise of democratization will collapse under its own operational weight.
The objective is to enable scale, not just access.
We need to give private markets the efficiency of mutual funds...while keeping the performance edge that made alternatives worth it in the first place.
And 401(k)s are only one segment of new demand! The wealth channel is much broader and more global.
So all of this is only a fraction of the demand coming…
The EO opens the door.
Now builders need to make private markets retirement-ready.
Let me know what you think.
by Marc Andrew
INFRA TAKES (Who’s Building What)
CAIS + Solactive AG launched the first standardized benchmark for private credit BDCs: tracking 40 funds, $130B in net assets, and 8,000+ underlying loans in one transparent index. The big idea: Give private credit the benchmarking infrastructure that public markets have had for decades - turning their data black box into comparable, rules-based analytics. Independent advisors will gain institutional-grade tools to evaluate what was previously fragmented and opaque. Because an asset class nearing maturity demands mature infrastructure. More here.
iCapital hired Sonali Basak, Bloomberg Television's former lead Wall Street correspondent, as Chief Investment Strategist for investment outlook and thought leadership. The big idea: Platforms will compete on narrative as private markets push into wealth channels - making media talent strategic infrastructure, not marketing spend. When you're selling complexity to retail, the messenger matters as much as the message.
GeoWealth secured $38M Series C led by Apollo, with BlackRock, JPMorgan Asset Management, and Kayne Anderson joining to expand public-private model portfolios for RIAs. The big idea: Private market players will fund the distribution technology for their own products - because institutional-grade alternatives mean nothing without operational infrastructure to reach thousands of advisors. The bottleneck has shifted from capital to distribution. More here.
MIT-based Fundamental Research Labs released Shortcut: AI-powered Excel that looks exactly like Excel but with automated modeling and intelligent error checking built in. The big idea: Instead of killing Excel with "better" solutions that always fail, enhance the tool that runs every fund model and LBO analysis in private markets. This could automate hours of analyst spreadsheet work without forcing anyone to learn new software. Check it out here.
HarbourVest Partners hired Venu Krishnamurthy, former Global Head of BlackRock's Aladdin Wealth, as Managing Director and Head of Global Private Wealth to lead sales, marketing, and operations for the firm's 15-year wealth platform expansion. The big idea: Private equity firms will increasingly compete on distribution architecture as alternatives become core high-net-worth allocations - making proven wealthtech talent a key element of strategic infrastructure.
OVERHEARD IN PMF CONVERSATION THIS WEEK:
“The best AI conversations are going to another level, really, like: observability evaluation, how to structure agents, how to prevent them from going rogue.”
“There's all this capital that's pushing for things where, I mean, think twenty years ago, where when I went to business school, you had people chasing equity returns. They started at 25% and up, and that was sort of your CAPM model. And then there are pieces chasing debt returns, and they started at you know, 11% and went down. Well, that's a big delta in the middle. What's in the middle? Well, there wasn't granularity of financing solutions in the middle. Well, now there is.”
"Under U.S. tax law, Publicly Traded Partnership (PTP) rules cap secondary trading for most funds at just 2% of their value each year. This creates a queue effect, where buyers face scarce opportunities, limiting automated rebalancing and stalling true market fluidity. It will be interesting to see if policymakers revisit these limits."
“What's crazy is the administrative burden placed upon LPs despite them being somebody everyone wants to please. There's so much more to do here!”
If you’re interested in our lead story on how to scale private markets transaction, join us in NYC on Dec 11:
