Private Markets Alert Newsletter

✍️ Op-Ed: The Replication Paradox - Private Markets Embrace Liquidity Illusions

Goldman Sachs launched a private equity ETF holding zero illiquid assets, delivering "private equity-like returns" through 1,500 public equities tracking MSCI's $7.7 trillion dataset at 0.5% fees while avoiding lockups and capital calls. Yet private credit managers dropped covenant protections competing with banks, while non-traded BDC redemptions surged 200% to $2.9 billion in Q4. Franklin Templeton retrofitted money market funds for blockchain, addressing distribution mechanics rather than value creation.

The contradiction: democratization accelerates through liquid products as institutional capital consolidates toward platforms with proprietary deal flow and operational expertise. BCG argues PE's advantage shifts rather than shrinks, with returns depending on operating capability over financial engineering. The question: does ETF accessibility capture alpha, or repackage beta at private market fees?

🤝 Top Deals & Market Activity

• Global PE deal value surged 43% in 2025 to $1.5 trillion as normalized financing and compressed hold periods drove exit acceleration, though Q4 deceleration suggests momentum may be peaking.

• Goldman Sachs launched GTPE ETF replicating PE returns through 1,500 global public equities with 0.5% fees, joining liquid alternatives delivering PE exposure without illiquidity or operational complexity.

• Franklin Templeton enabled two money market funds for blockchain settlement and regulated stablecoin reserves under the GENIUS Act, positioning traditional cash management for tokenized finance infrastructure.

• Private credit managers reduced covenant protections competing against banks offering attractive terms, adopting permissive structures once rare in the $1.7 trillion market as deployment pressure intensifies.

• Non-traded BDC redemptions jumped 200% in Q4 to $2.9 billion across vehicles managing over $1 billion, with investors citing lighter covenants and deteriorating underwriting quality.

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