Public Meets Private: Introducing a New Morningstar Newsletter

Later this month, PitchBook and Morningstar are jointly launching a new weekly newsletter called Public Meets Private. Led by Alexander Davis of PitchBook, the newsletter will concentrate on all of the news, analysis and research you need to understand one of the most transformational trends in today’s markets. Sign up here.

Private markets have never been as large or as accessible to the broader investing public than they are today.

At a time when the opportunity set within the publicly traded stock market has been shrinking and the few largest companies are driving the returns of the entire market, investors are starting to look for alternatives. Rising demand, regulatory tailwinds, and capital restructuring are reshaping how individual investors can tap into private markets. This trend has a name: public-private convergence.

This trend is driving widespread interest in a fast-growing body of alternative private investment products targeted at accredited investors and other individuals. Because investors and their advisors need access to actionable data, insights and education about these trends, Morningstar and PitchBook have recently launched a new body of research and news coverage, which will be showcased each week in the new Public Meets Private newsletter, launching this month.

Private market investments—such as private credit, private equity, venture capital, and real assets—are now being offered within vehicles accessible by a wider range of investors. This includes evergreen funds (or semiliquid funds), which allow continuous investment and greater liquidity through an open-end structure. Evergreen fund assets have doubled since 2022, while direct lending assets under management have more than tripled, according to Morningstar and PitchBook’s latest Evergreen Fund Landscape report.

This breaking down of the old barriers has ushered in a new opportunity set for investors and managers alike. It also, however, has heightened challenges and operational risks from having a radically reshaped client mix with sometimes conflicting investment priorities and risk profiles, not to mention varying time horizons and levels of sophistication about private assets.

As Morningstar’s manager-research analysts have documented, many of the new products are complex, with opaque pricing of the underlying investments, higher fees and barriers to withdrawing money that are the polar opposite of the ease of trading exchange-traded funds. Knowing how private investments can fit into an investor’s portfolios takes a real understanding of their structures and the asset classes themselves.

For financial advisors, this makes it critical to educate themselves so they can in turn best serve clients who may be interested in investment alternatives. The same goes for small investors as more defined-contribution plans such as 401(k)s consider adding private fund offerings, but those new retirement products may not live up to industry hype. As regulations ease, investors exploring potential benefits must be aware of hidden fees and other risks lurking in new investment opportunities. And for asset managers, this convergence is bringing a host of new products and regulatory developments.

All of this and more will be covered in Public Meets Private. In it, you will find timely news articles and research written by private equity and private credit experts from PitchBook, as well as mutual fund analysts and other commentators at Morningstar. That includes coverage like when PitchBook and Morningstar analysts joined forces on recently launched evergreen fund indexes, aiming to deepen investor knowledge about the intersection of wealth and alts. Earlier this year, Morningstar started to track and rate semiliquid funds with a methodology based on the Medalist Ratings for mutual funds.

We hope you’ll follow the story by subscribing to the new newsletter.