Globacap has shared some perspectives on private markets in 2025 and expectations for the upcoming year. Based in the UK, Globacap, a partner of tokenization enabler Tokeny, is on a mission to enable the future of private securities by leveraging Fintech. The company believes the current environment is “stuck in the technology dark ages.” The company utilizes blockchain technology to provide solutions like Secondary Marketplaces and funding round management.
Myles Milston, co-founder and CEO of Globacap, shares that 2024 was a great year for their business, and they expect this growth to continue. He reported that private capital markets “have continued to take huge strides forward over the past year” and that assets under management have jumped by 20% per year since 2018 – 2X the rate of public markets.
“This growth wouldn’t be possible without increased adoption of new technology, which has improved access and leveled up efficiency in private markets. Public markets have been largely digital for a long time, but private markets have been slower to digitise, operating through expensive intermediaries with a great deal of red tape around ensuring secure, efficient cash custody and legal title transfers,” says Milston. “However, private markets are starting to rid themselves of dreaded Excel sheets, fax machines, and other manual processes. Instead, participants can now expect automated workflows and rapid execution, making them more attractive than ever before.”
Milston reports that two-thirds of institutional investors have boosted private market investing in 2024, and 90% believe private markets will outperform public markets over the long term.
“While private markets haven’t quite reached the efficiency levels seen in public markets yet, the gap is rapidly closing, driving growth and democratising access to investment opportunities.”
Secondaries are key to market growth. Once the realm of backroom deals, technology has enabled private markets to access needed liquidity. Milston says investors may now easily access private securities, and market efficiency is improving.
“The growth in the private secondaries market is helping to drive the tectonic shift we’re witnessing from public to private capital markets. As liquidity, funding and efficiency improve, private markets are increasingly able to compete with public markets for investors’ attention,” stated Milston. “With public companies representing just 0.1% of investable assets, and technology making private markets ever-more accessible, secondaries will continue their record-breaking growth for many years to come.”
The UK has recognized a need to improve capital markets by seeking to enhance both private and public markets. If the UK wants to maintain its status as a top global financial center, it does not have a choice. PISCES (the Private Intermittent Securities and Capital Exchange System) is part of this initiative. It is described as “a key part of the [UK] Government’s strategy to reinvigorate capital markets through pro-innovation and pro-growth policies.”
A consultation is ongoing, with a deadline for feedback on legislation by January 2025. The original consultation closed this past April. The government’s goal is to support a pipeline for future IPOs.
Milston notes that the Chancellor committed to PISCES going live by May 2025, but he believes it will lead to a decline in public listings.
“Traditionally, companies went public to access larger capital pools, despite the high costs and complexity of the IPO process. However, in recent years, private markets have advanced to the point that firms can secure the vital funding they need for growth without the headache of a public listing. PISCES will enable more firms to stay private by creating a formal framework by which secondary trading of those companies’ shares can take place. This gives them simpler access to private capital and investors access to more liquidity in private assets. ”
Milston believes that private market trading platforms will be a better alternative to AIM, which struggles to provide continuous liquidity, and that PISCES will emerge as a catalyst for the UK’s private market ecosystem, providing competition for public markets, unlocking more capital, and fueling growth.
Milston explains that as HNWIs and family offices pursue private equity and venture deals, private market allocations are growing.
“HNWIs and family offices are unburdened by the allocation limits that some institutional investors adhere to, meaning they’re free to ramp up investment to different asset classes as they see fit. This enables them to direct more funds towards private markets, diversifying their portfolios and capturing the higher returns on offer,” Milston states. “HNWIs and family offices’ small size often acts as a barrier to entry into the market. High minimum investment requirements are common for private market opportunities such as private equity or venture capital, meaning that HNWIs and family offices are often unable to invest. ”
He says that next year will see HNWIs increasing their investment in private markets as these markets continue to improve, offering alternative vehicles to access them.
“However, strides forward in private markets’ technology have reduced transaction times and opened up accessibility to make private markets an attractive alternative to traditional public markets. Additionally, new technology and products, such as digital nominee solutions that offer alternatives to traditional structures such as feeder funds and SPVs, have made it feasible for asset managers to take HNWI investment at scale efficiently.”
The UK government is considering retail participation in PISCES but may limit it to more sophisticated individuals. The consultation states:
“The government has carefully considered whether retail investors should be able to access PISCES platforms. Private companies whose shares are traded on PISCES will be subject to lower levels of disclosure and investor protection than shares traded on public markets. Investor protection requirements, therefore, need to be balanced against the breadth of access, in particular to retail or less sophisticated investors … Subject to feedback, the government does not intend to allow general retail investors to access PISCES platforms. The government is, however, considering whether certain categories of retail investors may be able to buy shares through PISCES.”
These certain categories include “self-certified sophisticated investors” as defined by the Financial Services and Markets Act of 2000.