Retail Access to Private Markets Will Depend on Transparency, Education

As private market investments become increasingly popular as retail investment products–including retirement plans—regulators and industry executives at two Securities and Exchange Commission roundtables said the expansion can succeed only if transparency and investor education keep pace.

The discussions—hosted by the SEC in Washington, D.C. on March 4—focused on how assets traditionally confined to private funds—such as private equity and private credit—are migrating into publicly offered vehicles and semi-liquid fund structures. Panelists said that shift is creating both opportunities and risks for investors who may be unfamiliar with the liquidity of private assets and the way they are valued and traded.

“Private markets are one of the great engines of American enterprise,” SEC Chair Paul Atkins said during the March 4 meeting. But he stressed that expanding access must be carefully calibrated, adding that the agency is focused on “reasonable retailization” that allows investors broader exposure while maintaining appropriate safeguards. “The presence of risk is not the grounds for the perfect perpetuation of exclusion.”

Highlighting the risks and scrutinizing the benefits and potential of private asset classes to broader market participants is paramount after President Donald Trump issued an executive order in August 2025, granting a long-sought wish of alternative asset managers: to have a wider presence in defined contribution plans. As part of the order, regulators, including the SEC, are developing guidance to provide clear fiduciary pathways for adding semi-illiquid fund structures to DC plan investment menus.

Across both SEC sessions—one examining how private assets are moving into public investment vehicles and another focused on governance and valuation practices—speakers repeatedly returned to the same conclusion: Retail investors can participate in private markets, but only if investors better understand how these investments differ from traditional public-market securities and if firms provide clearer disclosures on valuation methods, liquidity constraints and fees.

When Public and Private Markets Meet

The first panel, moderated by Brian Daly, director of the SEC’s Division of Investment Management, explored what happens when assets historically traded in private markets are packaged into products sold to a broader investor base.

Daly noted that private funds now hold more than $31 trillion in gross assets, underscoring the scale of their growth. But the panelists said the valuation and liquidity characteristics of private investments differ fundamentally from publicly traded securities.

Katie King, a partner in PwC who specializes in asset valuation, said fair-value pricing—or best-estimate pricing—plays a central role in helping investors understand what they own.

“One of the reasons why fair value is so important is the fact that it provides transparency,” King said. “It’s a clear, consistent, objective way so everybody really understands the current worth.”

In public markets, prices are continuously discovered through trading, she explained. Private market investments, by contrast, may go long periods without transactions, and those transactions may not be on public exchanges, meaning valuations rely more heavily on models, assumptions and judgment. That difference can create confusion for investors comparing public and private assets.

Cliff Asness, a panelist and the founder and CIO of AQR Capital Management, warned that private investments can appear less volatile simply because they are priced differently.

“Very often, you see people mixing and matching statistics done in private and public [markets,] and you just can’t do that,” Asness said. “They’re not calculated the same way.”

For retail investors, he added, it may be safest to assume private equity behaves much like public equity over long periods—even if short-term reported volatility looks lower.

Valuation Processes

John Finley, Blackstone’s chief legal officer, said skepticism about private valuations often overlooks the governance and oversight built into many investment products.

“Given the critical role that valuation has … there are cynics with regard to how that net asset value is set,” Finley said. But he pointed to multiple safeguards, including valuation committees, independent directors, audits and third-party appraisals.

Transparency is a key part of that process, he added. Some retail-oriented funds disclose every underlying asset and the value attributed to it in regulatory filings.

“There’s a lot of process around putting those values together” in the absence of a public market price, Finley said.

Still, panelists acknowledged that private valuations inevitably involve judgment.

Marc Pinto, global head of private credit at Moody’s Ratings, described private valuation as “more art than science,” though he said that over time, public and private valuations should converge on a similar understanding of value.

Liquidity and the Fine Print

Liquidity—the ability for investors to sell an investment—emerged as a major theme.

Many retail-oriented alternative funds are structured as “semi-liquid,” allowing periodic redemptions but limiting the amount investors can withdraw at any one time and how frequently.

Pinto said investors must understand those limits before buying.

“Redemptions are at the discretion of the board [of the fund]; … they are not guaranteed,” he said. “Read the fine print.”

Panelists said misunderstandings about liquidity could grow as private investments become available to smaller investors with lower minimum investment thresholds. In defined contribution plans, however, daily plan-level liquidity is required, not fund-level liquidity.

Governance and Rule 2a-5

The second panel, moderated by SEC officials Blair Burnett and Michael Republicano, turned to governance issues, including how funds comply with Rule 2a-5, the SEC rule governing fair value determinations for investment companies.

Jamila Abston Mayfield, the chief regulatory services officer at compliance firm Comply, described the rule as establishing a structured framework around valuation.

“There’s a responsibility … for the board [of the fund] or their designee to own the valuation,” Mayfield said, noting that the rule requires policies, risk assessments, documentation and oversight of pricing services and valuation vendors.

That framework ensures valuation is treated as an ongoing process, rather than a one-time determination, panelists said.

Pete Driscoll, a PwC partner and former SEC enforcement and examination official, said technological advances—including artificial intelligence—are already reshaping valuation processes.

Panelists said the movement of private assets into retail investment vehicles is unlikely to slow, particularly as firms explore ways to include such investments in retirement accounts. But they cautioned that broader access must be accompanied by stronger investor understanding.

Blake Nesbitt, CIO at alternative asset advisory services and investment provider firm Cliffwater, said product structures must balance investor liquidity needs with the realities of underlying assets, emphasizing that liquidity is “the first, second [and] third most important thing” when designing such funds.