A new wave of investors flocking to the private markets is no surprise to Alex Robinson, CEO of Juniper Square, nor are the heightened expectations they have around the LP experience.
As private equity investments boom and the market, which sits at $25 trillion today, is expected to reach $60 billion by 2032, meeting the demands of this rising market have never been more critical for GPs.
In a new Juniper Square report developed in collaboration with PitchBook, Robinson shares his perspective on the opportunities this exponential growth unlocks and the challenges the industry must overcome as it races to keep up.
The “big opportunity” for the private markets
The boom in private equity investments has been driven by investors chasing returns in areas beyond the public markets. While the S&P 500 has seen a 15-year return of 495%, according to NASDAQ, it will be tough to repeat equities’ performance over the past 15 years, Robinson remarked.
Today, almost $14 trillion of net new capital is flowing into the private markets, Robinson noted, and over $7 trillion of that is coming from individual investors—most of whom are younger and/or relatively new to private market investing, or both.
Efficiency, automation, and scale are the whole game
It’s not just an influx of capital that these investors are bringing to the market. They also have enhanced expectations around information access, technology, and transparency, as they’ve come of age personally and professionally in eras of high-touch, tech-driven services.
“The private markets have historically been a clubby, cottage industry with little need for automation,” Robinson said. “If GPs want to earn their piece of this $7 trillion pie—and they must, given how many institutional investors have slowed their commitments—they’ll need to scale their operations and modernize their technology to meet the expectations of these overwhelmingly digitally native investors,” Robinson said.
Integrated, smart, and simple experiences will lead the way
Validating this trend are VC firms, which have collectively invested more than $15 billion in the past four years in wealthtech that apply innovative technologies to traditional wealth management, according to the report.
GPs who reevaluate and modernize their tech stack have an opportunity to stand out in the increasingly competitive environment, Robinson noted.
“We believe retail investors are about to shift the private markets like they transformed institutional capital 30 years ago,” he said. “This sea change demands that GPs make transformational investments in their products and operations if they hope to serve these LPs the way they’ve come to expect from the public markets.”
As GPs navigate this evolving landscape, they are relying on Juniper Square's modern, connected fund software and services to deliver the investing experience retail investors demand.
Read Robinson's complete commentary in the full report developed in collaboration with PitchBook.