Morgan Stanley examines the long-term shift from public to private equity markets in the U.S., exploring why capital, companies, and returns have increasingly migrated away from public listings. The paper challenges the assumption that private markets always outperform, noting similar long-run returns in venture capital versus public equities while highlighting structural changes reshaping capital allocation decisions.
Public To Private Equity In The United States: A Long-Term Look
Morgan Stanley
Michael Mauboussin, Dan Callahan
Research
82 Pages
Key Takeaways
Private Capital Growth Surge: Private markets raised $3.0 trillion versus $1.5 trillion public in 2017, reflecting a sustained capital shift driven by institutional demand and changing funding dynamics.
Fewer Public Companies: U.S. listed firms fell to about 3,640, roughly half of 1996 levels, as M&A activity and fewer IPOs reduced public market breadth.
Return Dispersion Reality: Top venture funds show ~50% persistence in top quartile performance, while buyout persistence drops to roughly 25%, emphasizing manager selection risk.
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