New CFA Institute Research and Policy Center report examines the implications of a changing balance between public and private capital formation

Mumbai, India: CFA Institute Research and Policy Center today launched the first report in a new research series examining how the growth of private markets is reshaping capital markets and the implications for market transparency, valuation, investor protection, and professional practice.

The series begins with the publication today of Understanding the Growth of Private Markets: Structural Shifts in the Investment Industry. The research identifies key questions that investment firms, policymakers, and regulators will need to address as private markets continue to expand.

Private equity, private credit, real estate, infrastructure, and venture capital now account for more than US$18 trillion* in global private market assets under management. Firms are remaining private for longer, and a growing share of corporate financing, restructuring activity, and credit creation is occurring outside public markets. The current surge in mega-cap IPOs underscores how much growth and capital formation takes place before companies reach public markets.

Rhodri Preece, CFA, Senior Head of Research at CFA Institute Research and Policy Center and co-author of the report, said: “The investment industry is at an inflection point. Recent high-profile IPOs illustrate just how much the capital formation process is changing. Increasingly, companies are listing on public markets at a much later stage of their development, after years of growth financed through private capital. This shift has implications that extend far beyond portfolio allocation to how capital markets function, how risk is distributed across the financial system, and how investors participate in economic opportunity. Professional standards, governance frameworks, and analytical tools will need to evolve alongside these structural market shifts.”

Pankaj Sharma, Director, Capital Markets Policy – India, CFA Institute commented: “With private market assets expanding globally, this shift in capital formation is increasingly relevant for India, where private capital is supporting infrastructure, credit, and enterprise growth. As the research highlights, a larger share of capital formation is now occurring outside public markets, which raises important policy questions around transparency, valuation practices, and the equitable distribution of investment opportunities. For India, strengthening disclosure, governance and regulatory frameworks will be critical to ensure market integrity and investor protection.”

Cheryll-Ann Wilson, PhD, CFA, Senior Affiliate Researcher at CFA Institute and co-author of the report, added: “The growth of private markets is not being driven by a single group. It is being driven by the mutually reinforcing incentives and actions of issuers, asset owners, intermediaries, and policymakers. As private markets scale, they alter mechanisms of price discovery, reshape benchmark composition, redistribute information across market participants, and influence how financial stress propagates through the system. The trajectory of private markets over the next decade will demand a recalibration of policies and practices.”

The publication is the first in a broader research series from CFA Institute Research and Policy Center examining private markets. Future research will include the emerging issues associated with retail access to private market investments, conflicts of interest and ethical considerations, private credit structures, and the policy responses needed to support market integrity and investor protection. It will also reveal new findings on the risk-return benefits of private markets assets in defined contribution retirement portfolios