Morgan Stanley boosts private markets offering with new secondaries platform

March 6, 2024 (Preqin News) – Morgan Stanley Wealth Management will provide investors and shareholders with the opportunity to buy and sell shares in private companies, adding to a rising trend pairing private wealth with alternative assets.

The firm has launched its Private Market Transactions Desk, which it describes as a ‘concierge service’ that allows eligible investors and shareholders to buy and sell private firm shares in the secondaries market. The desk was launched to ‘assist clients seeking liquidity in a highly fragmented and opaque secondary market’.

‘Alternative investments like private market shares are only growing in importance as investors seek deeper portfolio diversification,’ Jed Finn, Head of Morgan Stanley Wealth Management, said in a statement. The company is well-placed to ‘help meet the needs of both buyers and sellers within the private market,’ he added.

The operation will be run by new hire, Jeff Urban, who has previously led private and public market distribution and syndication businesses.

The secondaries market has grown in popularity as investors and shareholders seek opportunities to generate liquidity, while alternative exit pathways such as IPOs have become less attractive given issues such as valuation concerns. With fundraising from traditional alternative asset investors proving difficult, private wealth is becoming an increasingly important source of capital.

According to Preqin data, secondary fundraising in 2023 was a bright spot within private equity markets, as the sub-asset class raised a record $91bn, more than 2.5x the capital raised in 2022 ($34.8bn). Access to a liquid secondaries market may have increased appeal to private wealth investors, as they can retain agency over allocations.

‘As a larger percentage of capital formation and economic growth is occurring in the private markets, we aim to continue to work hand in hand with all of our clients to source and facilitate these opportunities to create lasting value,’ said Michael Gaviser, Head of Private Markets, Morgan Stanley Wealth Management.

More firms are exploring opportunities to meet private wealth’s demand for alternative assets. JP Morgan Asset Management announced plans on Monday to increase access for APAC private wealth managers and their clients to its private market capabilities.

Partnering with fintech platform iCapital, the firms aim to provide investors with access to asset classes including private equity, infrastructure, transportation, and real estate.

‘At a time of unprecedented benefits and demand for alternative investments, we see significant growth opportunities in private wealth alternatives and believe the democratization of private markets remains a key growth driver for the industry over the coming years,’ Gary Leung, Head of Alternatives for APAC clients at JP Morgan, said in a statement.

Interest in APAC has accelerated in the first quarter of 2024, with private capital players creating strategies, increasing allocations, and partnering with firms that have deep local relations and networks, such as the recent partnership between Tikehau Capital and UOB-Kay Hian Holdings.

‘The iCapital and JP Morgan Asset Management teams have a common goal to allow a broader range of wealth managers to access high-quality private markets investing opportunities that can help clients meet portfolio objectives,’ said Marco Bizzozero, Head of International, iCapital.

_{The opinions and facts included within the above do not constitute investment advice. Professional advice should be sought before making any investment or other decisions. Preqin providing the information in this content accepts no liability for any decisions taken in relation to the above.}