The Private Markets Are Not Private Anymore

And the old LP playbook is quietly breaking

Three reports landed in the past six months. Read together — BlackRock's Private Markets Outlook, the World Economic Forum's Future of Venture Capital, and Kauffman Fellows' Zero to Four — they tell a single, awkward story: the architecture institutional allocators built their alternative programs on has stopped working.

Begin with the numbers. US listed companies have halved since the mid-1990s, from roughly 8,000 to under 4,500. Globally, around 1,920 venture-backed unicorns remain privately held, representing over US$7.3 trillion in valuation, with an estimated US$3 trillion in unrealized value sitting on VC fund balance sheets. The median time to IPO has stretched to twelve years. And since 2022, US venture funds have drawn nearly US$200 billion more from their LPs than they have returned.

In other words: the assets are still appreciating; the cash is not coming home.

Three convergences

First, public and private markets are merging into what BlackRock calls a 'new continuum.' Evergreen funds crossed US$400 billion in NAV for the first time. US retirement plans are being opened to private allocations. The 60/40 portfolio is becoming 50/30/20.

Second, liquidity has detached from the IPO. Secondary transaction volume hit US$106 billion in 2025, nearly matching all VC-backed IPOs combined. But here is the catch most allocators miss — 86% of that liquidity clusters in just twenty companies. The long tail of private holdings remains effectively illiquid.

Third, the firms doing the investing are themselves under pressure. Roughly 20% of VC firms reach a fourth fund; only 8% become franchises. The differentiator, Kauffman Fellows finds, is rarely returns alone — it is partnership governance, IC design, and succession planning, set from day one.

What this means for allocators

The temptation is to allocate more to the same names. The data argues the opposite. Regions outside the US and China remain structurally undercapitalised — unicorn conversion rates run 2–5x higher in Northern America than in Europe or MENA. AI infrastructure is pulling private credit, infrastructure, and venture capital into the same financing problem, blurring asset-class lines that allocation policies still treat as separate. And DPI — not TVPI — is the only honest metric left.

The allocators who outperform the next decade will be those who underwrite three things their predecessors ignored: the durability of a GP's partnership, the design of its liquidity, and the congruence of its strategy to its fund size.

Private markets are no longer a discount window for illiquidity premia. They are where most of the world's economic value is being created — and trapped. Re-engineering how institutional capital accesses, prices, and exits that value is the defining LP question of the cycle.

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MUSU works with institutional allocators on private-markets strategy, secondary execution, and manager underwriting across the GCC and globally.

Contact: info@musux.ai

References:

• BlackRock. Private Markets Outlook 2026: A New Continuum. November 2025.

• World Economic Forum & Stanford GSB Venture Capital Initiative. The Future of Venture Capital: Unlocking Liquidity and Growth. May 2026.

• Kauffman Fellows. Zero to Four: How VCs Evolve from Fund to Firm, and from Firm to Franchise. April 2026.