Aztec Group | The retailisation revolution of private markets

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Through a combination of regulatory reform, technological advances and global macro-economic factors, the retailisation of private markets is giving retail investors the chance to participate in exciting alternative investment opportunities for the first time.

In this article Karen McSorley and Stephanie Atnas discuss how retailisation is impacting global private markets, how the secondaries market is coming of age, and how tokenisation and other emerging technology are reshaping the alternatives landscape.

Spare a thought for company COOs and CFOs currently in the middle of trying to deliver a stock market listing. In the world of corporate finance, has pricing IPOs and share placings ever been more challenging or uncertain than they are right now?

Just when markets were beginning to recover confidence after COVID, along came Putin’s invasion of Ukraine, leading to inflation hikes eating into company and household budgets. Add to that rising tensions between China and the US, and the yet to be understood consequences of AI and its impact on future employment levels, and it’s a heady brew for company boards and their advisors considering raising public equity right now.

While global equity markets feel particularly volatile at the moment, their decline has actually been slow and steady over the past 20 years. Just look at the figures. In 2003, there were 2,101 companies trading on the London Stock Exchange’s full board. Today, that number has roughly halved to 1,097. This lower number reflects not only fewer new share listings, but also that more companies are choosing to delist their shares and take themselves private.

The reasons for fewer publicly quoted companies are numerous and more complicated than simply these recent macro-economic events. But what cannot be disputed is the long-term strength of private markets as a cost effective and reliable source of expansion capital for investors.

One factor supporting private market growth is the increasing involvement of retail investors who are quietly revolutionising their operations. Faced with fewer listed companies to invest in, retail investors have long been eager to participate in exciting new private investment opportunities.