What is the private market?
For decades, individual investors have held stocks and bonds as core parts of their retirement portfolios. The “60/40” portfolio — composed of a 60% allocation to equities and 40% to fixed income — was a popular choice, as the equity portion was designed to provide growth over time, while the bond portion could offer income and potentially balance out returns during choppy equity markets.
For a variety of reasons, the traditional 60/40 portfolio has become less popular in recent years, particularly as people are living longer and many retirees fear they could outlive their savings. In addition, it was theoretically possible that stocks and bonds could both post negative returns at the same time. This became reality in 2022, as the Federal Reserve began raising interest rates as a means to combat raging inflation. While the Fed successfully tamed inflation, the series of rate hikes inflicted pain on 60/40 portfolios.
For the full-year 2022, the S&P 500 Index — a broad measure of the U.S. equity market — declined more than 18%,1 while the Bloomberg US Aggregate Bond Index — a proxy for the performance of the U.S. bond market — fell by 13%.2 Periods like 2022 show the limits of a so-called “diversified” 60/40 portfolio. While 2022 was an outlier, large losses by both major asset classes at the same time highlighted the importance of diversification, which may include traditional and alternative investments depending on the investor’s goal and risk tolerance.
The rise of alternative investments and the private market
Luckily for investors, alternative investments have become increasingly available as another portfolio option. The category of “alternative investments” includes a wide array of assets that are designed to go beyond traditional stocks and bonds, generally with a goal of providing diversification by aiming to generate positive performance that does not rely on favorable market environments. Some categories or alternative assets, like equity hedge funds, may invest in public stocks, but many alternative investments seek to take advantage of opaque or niche areas of the market. According to S&P Global, the private market could reach $15 trillion in assets by the end of 2025 and may surpass $18 trillion in 2027.3
Examples of alternative assets include commodities (like gold), hedge funds, private equity, venture capital, private credit, private real estate and private infrastructure, as well as farmland and timberland, and even art and other collectibles. Below, we briefly discuss examples of private assets, including shares of late-stage, venture-backed companies.
A brief overview of the private market
Private assets can vary significantly, ranging from an apple orchard to a Picasso canvas, but one feature they all have in common is that they exist outside of a publicly traded environment. Just as someone cannot simply purchase shares of a privately held oil pipeline by logging into their brokerage account, private assets are often restricted to certain investor types and require private contracts and other paperwork. Unlike publicly traded securities, private market assets often require a longer time horizon, have far less liquidity, and potentially carry more risk.
Examples of private market assets
Here are major areas of the private market that investors should be aware of to understand the private market ecosystem:4
1. Private equity
Private Equity (PE) generally refers to funds that invest in non-publicly traded companies using pooled capital.PE funds tend to invest in mature companies, often through leveraged buyouts (LBOs), which involve borrowing money to gain control of either a private company or taking a currently public company into private ownership.5 PE fund managers usually seek to exit their ownership stake in their portfolio companies via a sale to another fund or company, or through an IPO.
Historically, accessing PE has usually required large minimum investments and has been largely restricted to institutions, such as pension plans, university endowments, foundations, and family offices, as well as ultra-high net worth (UHNW) individuals. In recent years, there has been a push by PE managers to democratize access to individual investors, though broad availability to retail investors is still in the early stages.6
2. Venture capital
Venture Capital (VC) is a subset of private equity and includes funds and other pooled capital that tend to invest in early-stage startups and other less-mature companies. VC firms have provided seed capital to some of the largest tech companies in operation today, including Alphabet (the parent company of Google) and Meta Platforms (the parent company of Facebook and Instagram). Much like PE funds, VC funds have historically only been available to institutions and UHNW individuals, though VC has the potential to expand to broader markets in the future.7
3. Private credit
Private Credit can generally be thought of as the private market equivalent of the publicly traded bond market. Just like its public market counterpart, private credit encompasses a broad range of credit quality, maturity length, and issuer type.8 Private credit has grown significantly in recent years, at least in part due to banking regulations put in place following the Great Financial Crisis of 2008–2009, and private credit assets have reached nearly $2 trillion as of 2024.9 Unlike the public bond market, private credit is issued by non-banks like asset managers, often through private debt funds. Like PE and VC, private credit has primarily been targeted at institutional investors, though several asset managers have begun offering ways for individuals to gain access via funds like ETFs and closed-end funds.10
4. Private real estate and private infrastructure
Private real estate and private infrastructure involves the ownership of physical assets, including buildings, ports, oil and natural gas pipelines, and other tangible property. These are often illiquid investments that require long time horizons and have historically been primarily for institutions and UHNW individuals. Many investors look to real estate and infrastructure assets as ways to potentially combat inflation. Like other areas of the private market, there has been a democratization of access to private real estate in particular through real estate investment trusts (REITs), though with less liquidity than traditional publicly traded REITs.
5. Farmland and timberland
Farmland and timberland (as investments) involve the ownership of private agricultural production facilities (including farms, orchards, dairies, etc.) and managed forests. Farmland and timberland tend to be viewed as defensive assets and as portfolio diversifiers, as they may provide a steady income stream over long time periods that are not correlated to stock or bond market returns. Privately owned farmland and timberland have primarily been aimed at institutional investors.
6. Pre-IPO companies
Pre-IPO companies are generally comprised of late-stage, venture-backed companies that have gone through numerous funding rounds and have grown in size and revenue. Pre-IPO companies cover a broad number of sectors, ranging from AI companies to financial technology and many other areas.
Pre-IPO companies as a growing private market opportunity
The pre-IPO market has grown significantly in recent years. In the past, many of the largest and most successful startups saw an IPO as the ultimate goal to achieve liquidity for early investors and founders. Today, many companies are delaying or foregoing IPOs, with the average time between a company’s founding and its IPO increasing from just under seven years in 2014 to nearly 11 years in 2024.11
Accessing high-growth companies in the private market
What’s the result of this shift in companies staying private for longer? Investors can access some of the largest and most dynamic firms in the private market, as well as seek to find the next industry leader before they become more broadly recognized by other investors. Investors seeking access to large-cap private companies can find names like SpaceX (with an estimated valuation of nearly $800 billion)12 and OpenAI (with an estimated valuation of approximately $500 billion), as of January 2026.13
The expanding universe of private market unicorns
For investors seeking smaller companies, there is a growing opportunity set in that area as well. According to VC firm Andreesen Horowitz, today there are more than 1,000 tech “unicorns” worth over $1 billion in the private market, with a collective value of nearly $5 trillion.14 In addition, the IPO calendar in 2025 continues to heat up, as several high-profile companies completed successful IPOs, including cryptocurrency firm Circle, AI infrastructure provider CoreWeave, digital bank Chime, and design software provider Figma. While these companies are now publicly traded, there are hundreds of other potential investment opportunities in the private market.
How to buy shares of private companies on Forge
For investors interested in acquiring shares of pre-IPO companies, they cannot simply log on to a traditional online brokerage account and click a button or two to execute a trade. Instead, they need to look to marketplaces like Forge marketplace that seek to match buyers and sellers of shares of private companies. For individuals who may be interested in buying pre-IPO shares of a specific company on Forge, find a detailed guide explaining the steps leading to a transaction.
Who can invest in private companies
It is also important to remember that not everyone is eligible to invest in private companies. Only institutional investors with assets above $5 million and individuals who meet SEC guidelines for accredited investors have the ability to buy shares of private companies. For eligible investors, Forge seeks to offer access to shares of private companies, which is part of the overall private market ecosystem.
Take the next step
If you are interested in learning about purchasing shares of pre-IPO companies, we recommend reading “How to buy private shares on Forge: A complete guide,” which offers a step-by-step overview to the process. And if you would like to dive into the world of private market investing, you can sign up for Forge today to gain access to industry-leading data including Forge Price™, trading history, and other resources.
FAQs about the private market
What does "private market" mean?
The private market refers to assets that are not publicly traded. While the private market contains a broad swatch of investment types, it generally includes assets such as hedge funds, private equity, venture capital, private credit, real estate, infrastructure, farmland, and timberland, among other asset types.
The private market also includes late-stage, venture-backed companies that have not completed an IPO or other exit event.
What are the categories of private market?
The private market generally includes hedge funds, private equity, venture capital, private credit, real estate, infrastructure, farmland, and timberland, among other asset types. In addition, the private market also includes late-stage, venture-backed companies that have not yet completed an IPO or other exit event.
What asset class is private market?
The private market does not necessarily correspond to a single asset class, though private assets are generally considered “alternative investments” in contrast to traditional asset classes like publicly traded equities (stocks) and fixed income (bonds).
