Private Markets Alert Newsletter

✍️ Op-Ed: The Great Opening

The week that defines 2025's trajectory arrived with force: Charles Schwab announced a $660 million acquisition of Forge Global while private equity megadeals pushed Q3 investment to $537 billion despite plummeting deal volumes. WisdomTree launched blockchain-based NAV feeds for its tokenized private credit fund mere days after industry leaders warned of rising PIK debt threatening the sector. The collision is instructive: technology advances promise unprecedented democratization of private markets access precisely as consolidation accelerates and credit quality concerns intensify.

Schwab's acquisition of Forge for $45 per share represents a 72% premium, integrating a platform through which investors have traded more than $17 billion in private company shares. Meanwhile, private equity executives at Hong Kong's Global Financial Leaders' Investment Summit warned of coming consolidation, noting the U.S. has 19,000 private equity funds—more than McDonald's franchises—with performance bifurcation at historic extremes. Yet global PE investment reached $1.5 trillion through Q3 2025, positioning the year to exceed the prior three years' levels, driven overwhelmingly by megadeals despite deal volumes falling from 5,070 in Q3 2024 to just 4,062 in Q3 2025.

The paradox extends to credit markets. Payment-in-kind debt usage surged to 11.4% of private credit portfolios by Q2, with "bad PIK"—debt restructured mid-term to ease cashflow pressure—viewed by valuation firm Lincoln International as a "shadow default rate" now at 6%, up from 2% in 2021. Yet experts increasingly argue that private market growth, not SEC regulation, drives IPO decline, as the availability of private capital gives companies viable alternatives to public markets. Tokenization promises transparency that could address opacity concerns, but only if credit quality improves alongside infrastructure innovation.

🤝 Top Deals

• Charles Schwab to acquire Forge Global for $660 million, creating premier destination for retail private markets access with 46 million client accounts and $11.6 trillion in assets. Read more →

• PE industry consolidation warnings intensify as KKR notes 19,000 US funds exceed McDonald's franchises, with 80% facing zombie status within decade per EQT. Read more →

• Global PE investment reaches $1.5 trillion through Q3 2025 despite 20% volume decline, driven by Electronic Arts ($56.4B), Air Lease ($28.2B), and Dayforce ($12.4B) megadeals. Read more →

• AI transformation accelerates across PE lifecycle as 50% of respondents view generative AI as most transformative technology, with firms building proprietary sourcing engines. Read more →

• Private credit "bad PIK" debt hits 6% shadow default rate (up from 2% in 2021), with $43.5 billion in BDC PIK loans representing 15% of portfolios. Read more →

• Private markets strength, not SEC regulation, identified as primary IPO decline driver as capital availability gives companies viable public market alternatives. Read more →

• WisdomTree deploys Chainlink for tokenized private credit fund NAV data on Ethereum, enabling DeFi protocol integration for $130B+ AUM manager. Read more →

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