What happens when private markets go from thousands of trades… to millions?
Andrew Tarver laid out the math (and lots more!) on a new episode of my podcast: Modern Capital.
With even a 7-8% model portfolio shift to privates, the industry is looking at hundreds of billions in new allocations. At $10K-$20K ticket sizes, that's tens of millions of orders. Per year.
And it compounds. After a big public markets move, models rebalance automatically. Every quarter, every drift correction generates more orders.
Today's infrastructure handles 1,000 orders per FTE annually. The NIGO rate is 8%. Scaling requires 48,000 new ops staff and $10 billion to pay them. One platform.
This is a new Paperwork Crisis, staring us down.
Tarver's analogy: private markets today are where payments were 15 years ago. Paper slips, three copies, manual processing. The industry needs to go from imprinter to tap-to-pay.
The infrastructure is starting to emerge. InvestCloud’s Private Markets Network, Daphne, incubated by Motive and Apollo, gives GPs a single database to publish fund data through standard APIs to Bloomberg, Hamilton Lane, and wealth channels.
And of course many other other great companies working on solutions.
"If we can't get it to change in the next 18 months, we will really struggle in the next 3 years."
Listen to the full conversation here, on Spotify or Apple Podcasts.
And if you’re interested in this topic, we’re running The Private Wealth Infrastructure Summit in NYC on May 28 to discuss exactly this.
Apply to attend here.
