As private markets gain momentum and become a critical part of the financial landscape, investors and industry leaders are focusing on how to bring the transparency and efficiency of public markets into this evolving space.

While public markets have long benefited from streamlined processes and infrastructure, private markets have historically been more opaque, slower to execute, and often lacking in standardisation. However, technology is now helping to bridge that gap, and companies like Globacap are leading the charge by automating and digitising transactions in private markets, making them more accessible and efficient.

In a recent conversation with journalist and presenter Lukwesa Burat, CEO of Globacap, Myles Minton, explained how his firm is harnessing technology to enhance private market operations.

Their interview delves into the reasons behind the rapid growth of private markets, how Globacap is playing a key role in improving transaction efficiency, and the broader economic implications of this shift.  

In conversation with Myles Minton, CEO of Globacap

Lukwesa Burat (LB): Myles, lovely to have you with us. First off, what exactly is the rate of growth in private markets compared to public?

Myles Minton (MM): Private markets have been accelerating a lot quicker. Over the last 20 years, in the United States — and this is similar in most developed countries — the number of public companies has fallen by half. Over the last decade, private markets have accelerated at 1.7 times the rate of public markets.

LB: What’s enabling and accelerating that change?

MM: It started off with a macro trend, with very low interest rates for a very long time, and investors seeking high yield opportunities in places like private markets. However, in the last decade in particular, there’s been quite an advent of technology which has driven the growth or speed at which transactions can be executed, and lowered the risk for those investors in that transaction capability, and therefore more investors are participating in private markets. 

LB: What other impacts has this had?

MM: If you look at average pension fundholding around the world, there’s about 8 percent private markets versus the remaining 92 percent in public markets. However, that 92 percent public markets allocation represents only about 0.1 percent of investable assets out there. That’s a huge concentration risk. So, for an investor to be able to increase their allocation of private markets, it’s very beneficial for their portfolio. And that’s really an attractive proposition. So much so, that very recently one of the largest pension funds in the world, based in the US, said they’re increasing their private markets allocation to 40 percent of their portfolio.

LB: And how does secondary liquidity factor into this?

MM: Secondary liquidity is something that’s quite important. It’s one thing for pension funds to hold an investment for a decade, but it’s another thing for many other types of investors, such as family offices and smaller funds and so on. This year alone (2024), we have seen over $70 billion of secondary market executions, which is a record for the first half of the year.

LB: What role does Globacap play in facilitating this growth?

MM: Globacap brings public markets-like efficiency to private markets, if we were to engage in a private markets transaction; in public markets, there’s a whole lot of infrastructure that most of the time investors don’t see, but it’s there, which makes that execution extremely efficient, and introduces trust into the equation…  In private markets, that doesn’t exist. So we have to manually put those pieces of infrastructure in place. Globacat does all that in an automated manner. To date, our technology has hosted over 150 primary placement transactions and also executed over $600 million of secondaries with automated settlement finality.

LB: What are the broader implications of this for the economy?

MM: The implications are far-reaching. Around 70 percent of non-government employment globally is in private companies, and the majority of innovation originates in the private sector before being adopted by public companies. By making more capital available for private companies, we fuel employment, growth in private companies and innovation; that has far-reaching implications for the economy as a whole over the next decade.

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