A Quiet Gold Rush in Private Markets

The New Frontier Of Private Investing

Stephen A. Schwarzman. Photograph via Wikimedia Commons.

Licensed under Creative Commons Attribution-ShareAlike 2.0 (CC BY-SA 2.0).

Private markets—long the domain of institutional capital and ultra-high-net-worth investors—are undergoing a structural shift that is drawing renewed attention from a broader class of sophisticated investors.

As public markets contend with volatility, elevated interest rates, and compressed multiples, private businesses across select sectors are increasingly being viewed not merely as alternatives, but as primary engines of long-term value creation.

The appeal begins with a simple but powerful reality: the number of publicly listed companies in the United States has declined by nearly 40% since the late 1990s, even as the economy has expanded significantly.[1]

At the same time, companies are staying private far longer. The median time from founding to IPO has stretched from roughly seven years in the 1990s to more than 12 years today.[2]

That shift has fundamentally altered where value accrues—and who captures it.

Gregg Ficery, owner of Integgra Valuation & Advisory Services, underscores the tension this creates for investors navigating the space. “Private company investing has become increasingly challenging. The average term from start-up to exit has increased from seven years to 13 years, according to some reports, making it harder to justify illiquid investments,” he said.

“Also, wealthier professionals late in their careers who have been angel investment candidates may no longer have the patience for early-stage investments with longer holding periods.”

Yet despite these structural headwinds, capital continues to flow. Global private equity dry powder remains near record levels—estimated at over $2 trillion as of 2025—creating sustained pressure to deploy capital into attractive opportunities.[3] The result is a bifurcated market: overheated pockets alongside emerging areas of relative value.

Artificial intelligence sits squarely at the center of that divide. Early-stage capital in 2025 has “flowed more freely,” as Ficery notes, but disproportionately into AI. Investors have poured tens of billions into foundational model companies, infrastructure providers, and vertical AI applications.

According to PitchBook, AI-related startups accounted for nearly 35% of all U.S. venture capital investment in 2025.[4] However, valuations in marquee deals have raised concerns. Some late-stage AI companies are trading at revenue multiples exceeding 30x, levels that many investors view as difficult to underwrite for outsized returns.

This has prompted a rotation among more value-oriented investors into sectors where fundamentals are clearer and pricing more disciplined. Healthcare technology is one such area. Aging demographics, cost pressures, and regulatory complexity continue to drive demand for efficiency-enhancing solutions.

Digital health platforms, revenue cycle management tools, and AI-assisted diagnostics companies are attracting both growth equity and buyout capital. McKinsey has estimated that technology-driven productivity improvements could unlock up to $300 billion annually in U.S. healthcare savings.[5]

Energy infrastructure represents another increasingly attractive segment. The global transition toward renewable energy, combined with persistent demand for reliable baseload power, has created opportunities in grid modernization, battery storage, and midstream assets.

Blackstone President Jonathan Gray recently emphasized this theme, noting that “infrastructure is one of the most compelling areas we see today, particularly given the convergence of energy transition and digital demand.”[6]

Meanwhile, niche consumer and digital entertainment businesses are also drawing attention. The recent sale of a majority stake in daily fantasy sports company PrizePicks at a reported $2.5 billion valuation illustrates investor appetite for scalable, cash-generative platforms with strong user engagement. As Ficery succinctly put it, “The house always wins.”

Prominent investors are increasingly vocal about the strategic importance of private markets. BlackRock CEO Larry Fink has described private assets as “the future of investing,” arguing that traditional 60/40 portfolios are evolving toward allocations that include private equity, private credit, and infrastructure.[7]

Similarly, Apollo Global Management CEO Marc Rowan has highlighted private credit as a particularly attractive segment in the current rate environment, given its ability to generate double-digit yields with structured downside protection.

Interest rates themselves are a critical part of the equation. After a decade of near-zero rates, the higher-for-longer environment has reshaped financing dynamics. Leveraged buyouts, once fueled by cheap debt, now face higher borrowing costs, with private equity deal financing often priced at 8–12% or more depending on structure and risk.[8]

This has put downward pressure on valuations in certain segments, particularly traditional buyouts, while simultaneously boosting returns in private credit strategies.

The pricing landscape, therefore, is uneven. High-growth, narrative-driven sectors like AI remain expensive, while more cyclical or capital-intensive industries are seeing more favorable entry points.

Bain & Company reports that global private equity deal multiples declined modestly in 2024 and stabilized into 2025, with median EBITDA multiples falling from peak levels of ~12x to closer to 10–11x.[9] For disciplined investors, this represents a meaningful reset after years of expansion.

Academic institutions are also highlighting the structural advantages of private investing. Harvard Business School research has noted that private equity-backed companies often exhibit stronger operational improvements and governance structures compared to public peers, contributing to long-term outperformance in certain cases.[10]

At the same time, scholars caution that dispersion of returns is significantly wider in private markets, making manager selection paramount.

The opportunity, then, is not uniform—but it is substantial. As public markets become increasingly efficient and information-rich, private markets offer a different kind of edge: access, control, and the ability to shape outcomes over longer time horizons.

Still, patience remains the defining requirement. The extension of holding periods, the complexity of underwriting emerging technologies, and the evolving financing environment all demand a level of discipline that not every investor possesses.

As Warren Buffett famously observed, “The stock market is designed to transfer money from the active to the patient.” The same principle, perhaps even more so, now applies beyond the public markets.

Citations

[1] World Bank / Federal Reserve data on U.S. public listings decline

[2] Jay Ritter, University of Florida IPO research

[3] Preqin Global Private Equity Report 2025

[4] PitchBook-NVCA Venture Monitor 2025

[5] McKinsey & Company, “The Future of Healthcare Technology”

[6] Blackstone earnings call commentary, 2025

[7] Larry Fink, BlackRock Annual Chairman’s Letter, 2025

[8] S&P Global Market Intelligence, Leveraged Loan Market Data 2025

[9] Bain & Company Global Private Equity Report 2025

[10] Harvard Business School, Private Equity Performance Studies