Public Market Style Transparency in Private Markets

This article explores how transparency expectations are evolving as private markets attract more retail capital. It outlines what public‑style transparency means, details the growth of semiliquid funds, discusses data and valuation challenges, examines standardization efforts like the ILPA fee template and index solutions, and provides implications and best practices for asset managers and wealth managers. 

Bridging the Information Gap: Public‑Market‑Style Transparency in Private Markets — What It Is and What It Isn’t

Executive Summary

The democratization of private markets hinges on trust. As private assets become accessible to a broader range of investors, the absence of clear, comparable data has become one of the biggest hurdles. Retail fundraising in alternative investments reached USD 122 billion in 2025, yet U.S. retail allocations to private markets remain well below their share of global assets. Interval funds – semi‑liquid vehicles that hold private securities but offer periodic liquidity – have ballooned from $2.8 billion to $96.2 billion in a decade. Regulators, index providers and data houses are responding with public‑market‑style solutions: standardized reporting templates, transparent indexes and qualitative ratings for semi‑liquid funds. This article examines what “public market‑style transparency” means in private markets, explains why investors are demanding it, and clarifies what it does not mean. Ultimately, transparency will help bridge the information gap without erasing the characteristics that make private investments attractive.

Introduction

Public and private markets are converging. Historically, private equity, private credit and other alternative assets were the exclusive domain of institutional investors. Today, the mass‑affluent segment—households with USD 500,000–2 million in investable assets—and the affluent group (USD 2–5 million) together account for 36 % of U.S. households, yet their allocations to private markets remain disproportionately low. At the same time, global pension funds have built more than USD 10 trillion of private market exposure, with alternatives making up over 25 % of their portfolios. Retail investors are also waking up to the opportunity: U.S. retail fundraising in alternatives reached USD 122 billion in 2025, and a State Street survey found that 56 % of institutional investors expect retail‑style vehicles to account for more than half of private‑market fund flows by 2027.

This increased interest has amplified calls for transparency. Investors who are accustomed to daily prices, standardized reporting and clear fee disclosures in public markets now want similar information for private funds. Yet private markets operate differently: valuations are periodic, portfolios are concentrated and liquidity is limited. This paper explores the meaning of “public‑market‑style transparency” in this context, analyses recent initiatives to improve disclosure and explains why some of the public‑market conventions cannot—and should not—be replicated wholesale.

By the Numbers: Demand for Data

Retail Participation and Semi‑Liquid Growth

The growth of semi‑liquid funds underscores how quickly private markets are opening to everyday investors. U.S.‑domiciled interval funds, which hold private securities and must disclose their holdings, fees and performance, have grown from $2.8 billion to $96.2 billion in assets over the past decade. More than 70 new funds were launched in the two years leading up to mid‑2025. At the same time, only three out of 14 semi‑liquid private equity and venture capital funds in Morningstar’s database have outperformed the S&P 500 since inception. Investors pay dearly for these strategies—fees are typically two to three times higher than those for traditional open‑end funds, and private‑credit semi‑liquid funds almost always charge incentive fees, even when they lose money.

Institutional Adoption and Barriers

Institutional investors remain the backbone of private markets. Alternatives account for more than a quarter of many institutional portfolios, and global pension funds now hold over USD 10 trillion in private assets. Still, both retail and institutional investors face common challenges: high minimums, illiquidity, limited secondary markets, opaque fee structures and a lack of transparency. These hurdles have historically kept many investors on the sidelines, but the demand for yield, diversification and differentiated returns has reached a point where improving disclosure is no longer optional.

What Public‑Market‑Style Transparency Means

Transparency in public markets involves more than just publishing numbers. Public companies adhere to strict disclosure rules, release quarterly earnings, and are covered by analysts who provide continuous commentary. Listed funds must report their holdings, calculate net asset values daily and disclose performance, risks and fees. Translating this approach into private markets means implementing several key elements:

1. Standardized Reporting and Benchmarking

In 2016, the Institutional Limited Partners Association (ILPA) introduced a template for reporting fees and returns. An updated performance template released in January 2025 has been adopted by roughly half of the market. Standardization helps investors compare funds on an apples‑to‑apples basis. It also puts pressure on managers who have avoided detailed reporting to adopt comparable frameworks. Similarly, index providers such as S&P Dow Jones Indices are developing index‑based solutions that offer cost‑efficient implementation, scalable deployment and greater transparency. These indices aim to provide clear benchmarks for private equity and private credit strategies.

2. Enhanced Disclosure and Independent Ratings

Morningstar’s Medalist Rating for semi‑liquid funds is a good example of transparency in action. By extending their qualitative rating system—previously reserved for mutual funds and ETFs—to interval funds, Morningstar evaluates each fund’s process, people, parent and price, identifying which strategies are likely to outperform and highlighting those expected to underperform. This rating system provides a forward‑looking assessment of semi‑liquid funds and gives advisors a consistent framework to measure private strategies against liquid benchmarks.

3. Accessible Data and Analytical Tools

Advisors need clear, comparable and accessible data to guide clients confidently. Without universal identifiers, holdings analysis becomes challenging. Technology is addressing this gap: application programming interfaces (APIs) and real‑time analytics can collect data from multiple sources, deliver standardized reports and present information via dashboards. The CFA Institute notes that technology will mitigate the increased cost of transparency by shifting away from manual processes and adopting automation and artificial intelligence. This approach enhances oversight and allows investors to monitor performance and risk on a continuous basis.

4. Transparent Fees and Incentive Alignment

Clear fee disclosure is fundamental. The Morningstar article highlights that investors often pay higher fees for semi‑liquid strategies and that fee structures are complex, often including incentive fees. Public‑market‑style transparency would require managers to disclose management and performance fees, hurdle rates and catch‑up clauses in a standardized format. ILPA’s reporting template addresses this by mandating disclosure of carried interest, management fees and fund expenses.  Investors can better evaluate net returns when fee structures are transparent.

5. Governance and Conflict Disclosure

Transparency also encompasses the governance of private vehicles. The CFA Institute’s survey found that investors are concerned about preferential terms for certain investors, conflicts of interest between general partners (GPs) and limited partners (LPs) and advisor‑led secondary fund transactions. Reporting frameworks must address these issues by disclosing side letters, continuation fund terms, and conflict resolution mechanisms. Clear governance standards, aligned with ILPA and industry best practices, can reduce friction and build trust.

What It Isn’t: Respecting the Unique Characteristics of Private Markets

While transparency is essential, public‑market‑style transparency does not mean turning private assets into their public equivalents. Private markets offer long‑term capital, hands‑on governance and the potential for outsized returns. They are inherently illiquid, and valuations are typically updated quarterly or semi‑annually. Investing in private markets will differ from public markets, and retaining these unique characteristics is part of the value proposition. Over‑engineering disclosure can risk unintended consequences:

• Smoothing vs. Volatility: Private fund returns often appear smoother because valuations are not marked daily. Demanding daily pricing could create artificial volatility and misrepresent long‑term performance. Morningstar points out that private holdings’ returns may look smoother, but only a minority of semi‑liquid funds have outperformed the S&P 500.
• Liquidity Isn’t Free: Semi‑liquid funds provide periodic liquidity, but investors sacrifice daily redemption rights. Requiring more frequent liquidity may erode returns or force managers to hold larger cash buffers, reducing investment efficiency.
• Proprietary Data and Competitive Edge: Private managers invest in proprietary deal sourcing and operational improvements. Making all deal‑level data public could compromise competitive advantages and discourage value creation. Transparency should focus on fund‑level metrics, not proprietary intellectual property.
• Higher Costs: Enhanced disclosure and reporting impose administrative burdens, particularly for smaller managers. The CFA Institute notes that greater transparency can increase costs, although technology and automation can mitigate them. Fee disclosures should therefore help investors evaluate whether the incremental cost is justified by additional information.

Tools and Innovations Driving Transparency

Index‑Based Benchmarks and Data Providers

S&P Dow Jones Indices has introduced the S&P U.S. Private Stock Top 10 Index and the S&P Private Equity 50 Indices, measuring late‑stage venture‑backed companies and the performance of 50 large private equity funds. These benchmarks give investors a view into private markets that mirrors public‑market indexing. By collaborating with data providers such as Cambridge Associates and using consistent methodologies, index‑based solutions provide greater transparency and benchmark comparability.

Standardized Fee and Performance Templates

The updated ILPA template is a critical step toward harmonized reporting. By standardizing fees, carried interest and expense disclosures, and by adopting new performance metrics, it allows investors to compare funds more effectively. Over half of private funds have adopted the template, and pressure is mounting on the rest to follow. For wealth managers, these templates simplify due diligence and help incorporate private funds into client portfolios.

Independent Ratings and Analytical Tools

Morningstar’s new Medalist Rating for semi‑liquid funds applies a forward‑looking qualitative assessment using the same Gold, Silver, Bronze, Neutral or Negative designations it applies to mutual funds and ETFs. The rating evaluates each fund’s process, people and parent organization, and compares results to public and private indices. Advisors can use this rating to evaluate whether the return stream justifies the loss of liquidity. Tools like these, combined with holdings‑based analytics, help investors cut through marketing claims and focus on underlying quality.

APIs, Dashboards and On‑Chain Data

Technological advances are enabling real‑time data aggregation and visualization. The CFA Institute notes that private equity administration involves handling large amounts of data from myriad sources and that these data can be collected and analyzed in real time using APIs and analytics tools, then turned into a user‑friendly format on dashboards. Tokenization and distributed ledger technology take this a step further by embedding transaction and valuation data on chain. Smart contracts can automate capital calls, distributions and compliance checks, providing investors with transparent, time‑stamped records while preserving confidentiality at the transaction level.

Implications for Asset Managers

For asset managers, greater transparency is both an opportunity and a challenge. On one hand, adopting standardized reporting templates and transparent fee structures can differentiate their brand and attract capital. The CFA Institute notes that transparency provides a competitive edge and improves investor relationships. By showcasing consistent performance metrics and risk management practices, managers can stand out in a crowded marketplace. Additionally, independent ratings and benchmarks can validate performance and help managers secure distribution partnerships with wealth platforms.

On the other hand, transparency requires investment in systems, governance and compliance. Managers need to integrate data from portfolio companies, third‑party administrators and custodians into coherent reporting. They must address conflicts of interest, disclose preferential terms and align fee structures with investor outcomes. Small and emerging managers may find these requirements costly, but failing to adopt transparency could limit their ability to raise capital as the market evolves.

Implications for Wealth Managers

Wealth managers are the bridge between private funds and retail investors. Enhanced transparency helps them fulfill fiduciary duties, manage risk and communicate clearly with clients. Key benefits include:

• Better Due Diligence: Independent ratings and standardized data allow advisors to evaluate private funds alongside public equivalents. Morningstar’s Medalist Rating and ILPA reports provide objective assessments of strategy quality, manager alignment and fee structures.
• Improved Client Education: Clear disclosure of holdings, valuations and fees helps advisors explain the trade‑offs between liquidity and potential returns. Retail investors can make informed choices about how much illiquidity they can tolerate.
• Risk Management: By monitoring performance data and cash‑flow profiles, advisors can manage liquidity risk and ensure that client portfolios remain diversified. Transparent reporting helps identify concentration risk and single‑manager exposure.
• Compliance and Reporting: Regulatory scrutiny is increasing as private markets open to retail investors. Advisors must comply with suitability requirements and ensure that products align with clients’ risk profiles. Standardized disclosures make compliance easier and reduce the risk of mis‑selling.

Opportunities and Outlook

The drive for transparency is reshaping private markets. Several trends suggest that public‑market‑style disclosure will become the norm:

• Regulatory Momentum: Authorities around the world are adopting frameworks that encourage more frequent reporting and investor disclosure. The updated ILPA template and regulators’ focus on fee and valuation transparency will push lagging managers to conform.
• Growing Retail Demand: Retail investors control trillions in financial assets and are hungry for differentiated returns. With mass‑affluent households representing 36 % of U.S. households but holding limited private exposure, there is room for growth. Transparent products will unlock this demand while maintaining fiduciary standards.
• Technological Innovation: APIs, automation and tokenization enable real‑time data collection and dashboard reporting.These tools reduce administrative costs and enhance risk management.
• Education and Benchmarking: Index‑based solutions like S&P’s Private Equity 50 indices and independent ratings from Morningstar provide benchmarks and performance comparators. As these tools become more widespread, investors will expect similar transparency across all private funds.
• Balanced Disclosure: Finally, the industry must strike a balance between transparency and the unique attributes of private markets. Managers and regulators should avoid imposing daily mark‑to‑market reporting or unnecessary liquidity requirements that could erode returns or undermine proprietary information. Instead, the focus should be on delivering timely, standardized data at the fund level, with clear explanations of strategies, risks and fees.

Conclusion

Public‑market‑style transparency is not about erasing the differences between public and private markets—it is about bridging the information gap. By adopting standardized reporting, transparent fee structures, independent ratings and technological solutions, the private‑market ecosystem can build trust and attract a broader base of investors. At the same time, stakeholders must respect the illiquidity, long‑term horizons and proprietary nature of private investments. The future belongs to managers and platforms that embrace transparency while safeguarding the qualities that make private markets a valuable complement to traditional portfolios.

Key Takeaways

• • Demand for data is surging: Retail fundraising in alternatives reached USD 122 billion in 2025, yet retail allocations remain below private markets’ 10‑15 % share of global assets. Semi‑liquid interval funds have grown from $2.8 billion to $96.2 billion in a decade, highlighting the need for better data and tools.
  • Transparency means standardization, not commoditization: Initiatives like the ILPA reporting template and S&P’s index‑based solutions bring comparability and benchmarking to private markets. Morningstar’s Medalist Rating extends independent qualitative assessments to semi‑liquid funds.
  • Public‑market discipline has limits: Private markets should not adopt daily mark‑to‑market valuations or unlimited liquidity. The value proposition of private assets relies on illiquidity, long‑term horizons and proprietary information.
  • Technology will narrow the gap: APIs, automation and tokenization enable real‑time data collection and dashboard reporting. These tools reduce administrative costs and enhance risk management.
  • Transparency benefits all stakeholders: Asset managers who adopt transparent reporting and governance standards gain a competitive edge and attract capital. Wealth managers can make informed recommendations and fulfill fiduciary duties, while investors gain confidence and clearer expectations about returns and risks.