What are private markets?

Most private-market money goes through funds that a general partner runs and limited partners, such as pensions, endowments and family offices, invest in. Holdings are valued by the manager, often quarterly, rather than priced by a market every day, and there is far less public disclosure than for listed shares. Hedge funds are also counted as alternative investments, but they mostly hold traded securities and let investors withdraw more often.

Say an investor commits $10 million to a private equity fund, which calls the money over several years as it buys companies. Instead of shares it could sell any day, it holds a stake in the fund that is valued each quarter and paid back as companies are sold. Simple example. Terms vary by fund.

Money in them is usually tied up for years and valued only periodically, so investors weigh the chance of higher returns against getting their cash back slowly.

• SEC Proposes to Modernize the Interval Fund Framework and Expand Multiple Share Class Structures
  Securities and Exchange CommissionRegulationSeward & Kissel LLP via JD Supra +1Nov 3
• UK FCA Findings On Conflicts Of Interest And Fair Customer Treatment In Private Markets
  RegulationA&O Shearman via JD SupraNov 3
• SEC Proposes Rules to Expand Private Market Opportunities Through Registered Fund Structures
  RegulationGoodwin via JD SupraNov 2
• Vermont commits $237m across private markets
  LPsAlternatives WatchNov 2
• N.Y. State Teachers allocates $2.7 billion across private markets, equities
  LPsPensions & InvestmentsNov 2
• New Hampshire Retirement System makes $125 million in private market commitments
  LPsPensions & InvestmentsOct 30