Good afternoon, and happy Friday. 

Private markets are now $22+ trillion - nearly the GDP of the United States. Do they allocate capital as efficiently as public markets?

They don't. Let's talk about why:

Research has shown that public markets allocate capital substantially more efficiently than private markets. 

That’s why the opportunity we discuss here - to build a new infrastructure of private markets - isn't incremental. 

It's about transformationally better economic outcomes. For billions of people.

We released the insight report from October’s LP Tech Summit yesterday. It details the structural technology issues LP technologists face, and is worth your time.

But I wanted to follow up with something bigger, that we tend to forget.

Bringing better structure to private markets isn't just about LP or GP operations. It's about how private markets can best serve their role in the economy.

Better technology infrastructure means better capital allocation, which means real assets get built, important energy project gets funded, the productive investments get made. That's not just returns - it's economic outcomes for billions of people.

The allocation gap shows up especially in late-stage deals that generate less revenue growth, fewer patents, less economic value than comparable public transactions.

The cause isn't the assets themselves. It's the information environment. When capital allocators can't see performance clearly, compare opportunities accurately, or access markets efficiently, capital doesn't flow to its best uses.

Private capital is measured in the tens of trillions. And yet there's no central exchange. No standardized reporting. No shared infrastructure to speak of.

Public markets built that infrastructure over centuries. Exchanges, clearinghouses, common data formats. Not because anyone coordinated out of goodwill. Because the alternative was chaos. The forcing function was survival.

Private markets never had that forcing function. They grew up bilateral, relationship-driven, opaque by design. It worked when the asset class was small. It's starting to break now.

LPs face opaque disclosures, delayed feedback, and heterogeneous data. Disclosures arrive quarterly, months late. Every GP uses different formats. A single LP may manage hundreds of GP relationships, each reporting differently. Modern portfolio management tools require clean, frequent data. Private markets offer the opposite.

The mismatch is structural. The cost is real.

Pensions funding retirements. Endowments funding universities. Sovereigns funding national priorities. These institutions are deploying capital through a system that's measurably less efficient than it could be. This at a moment when private capital is supposed to fund the infrastructure buildout, the energy transition, the AI deployment that will shape the next fifty years.

$68 trillion in global infrastructure needs by 2040. Nearly 11 million jobs supported by PE and VC-backed companies in Europe alone.

The capital is there. The deployment mechanisms are what's lagging.

So what builds the standards?

GPs benefit from opacity. Vendors build customer platforms, not shared infrastructure. Regulators lag.

LPs are the only players who bear the full cost of fragmentation, sit across enough counterparties to see the whole picture, and have the scale to make standards stick.

But coordination without a forcing function is hard. History suggests it usually takes pain. Another denominator crisis. Regulatory intervention. Markets seizing up.

The question is whether LPs can get ahead of that.

It's the central question I'm organizing my work around. The Summit, this report, everything we're building at the Private Markets Forum. Not because enlightened self-interest will be enough. But because the connective tissue needs to exist before the moment arrives.

Enjoy your weekends,

Marc.

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