Merryn Talks Money Doing Your Due Diligence on Private Markets
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Jun 17, 2025 Kunal Kapoor, CEO of Morningstar and expert in investment insights, shares his valuable knowledge on navigating the opaque world of private markets. He discusses the rising significance of private credit and equity in today’s investment landscape. Kapoor explains how Morningstar enhances due diligence to empower investors in identifying quality opportunities. He also highlights the evolving dynamics of capital borrowing and the growing need for transparency in fees, stressing the importance of informed investment strategies.
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Growth and Role of Private Markets
- Private markets have grown significantly and now include more companies than public markets in Europe.
- Private credit is the largest part of private markets, filling gaps left by traditional banks post-financial crisis.
Private Equity Premium Questioned
- Private equity's return premium over public equity may be minimal as liquidity dries up.
- Public and private markets are likely more correlated than commonly believed.
Illiquidity Affects Private Equity
- Private equity is less liquid, as investors hold longer term assets.
- This longer holding period may partly explain its distinct returns compared to public markets.