Risks associated with the rise of private assets

Private markets, including private equity, private credit, venture capital, and infrastructure, have transitioned from the margins of finance to become core components of institutional portfolios. Retail investors are also increasingly gaining access to these unlisted assets.

While these markets offer potential for higher returns, they carry significant risks. These include long lock-up periods, high leverage, complexity, and valuation methods that may mask true volatility. The use of infrequent, model-based pricing can create an illusion of stability, meaning that a stable price is not necessarily synonymous with a safe one.