Expanding Access to Private Capital Markets: Proceed with Caution
The Financial Economist Roundtable (“FER”) met on July 20-22, 2025, to discuss current efforts to increase investor access to private capital. While advantages may exist for long-term retail investors, intermediaries and regulators should be cautious about well-known investment problems that increased access can introduce. The most significant risks include overpaying for private assets, dilution during deposits and redemptions in open-end funds, and harmful real economy disruptions that might arise when extraordinary liquidity demands lead to runs. We discuss these issues and identify ways investors, intermediaries, and regulators might address them.