The New Rules of Private Market Investing

Mark Haefele, Chief Investment Officer at UBS, opens his book The New Rules of Investing with a deceptively simple idea: the rulebook has changed.

The New Rules of Private Market Investing

What worked for investors for the better part of five decades no longer applies. The world has been rewired, and so have the places where wealth is built. He’s right. And nowhere is the rewrite more dramatic than in private markets.

The path was clear for most of modern financial history:

• You bought a diversified portfolio of public stocks
• Waited for companies to IPO
• Let the public markets do the work

That framework made sense when the best companies went public early, when the majority of their value creation happened after listing, and when the public markets were genuinely where growth lived.

None of those conditions reliably hold anymore. The old rules have been replaced, whether investors have noticed or not.

Old Rule #1: IPO early, capture the growth

In 1999, the median age of a company at IPO was four years. You were buying into companies near the beginning of their growth curve, the upside was in front of you.

By 2024, that median had climbed to 13.5 years, according to University of Florida professor Jay Ritter, who has tracked IPO data for decades. Companies are going public older, larger, and further through their growth trajectory than at any point in modern market history.

The result is that public market investors are increasingly arriving late. Andreessen Horowitz put it plainly in a 2025 report: companies in the 2014–2019 IPO cohort generated more than 80% of their market capitalisation after listing. For the more recent cohort, that ratio has flipped: more than 50% of value was created while these companies were still private.

• SpaceX was founded in 2002. It is only now, 24 years later, preparing to IPO at what analysts estimate could be a US$1.75 trillion valuation.
• OpenAI, founded in 2015, crossed US$300 billion in private valuation without listing a single share on a public exchange.
• Anthropic, founded in 2021, has already reached US$60 billion in private markets.

If you waited for the IPO, you missed the decade.

Old Rule #2: Buy public, diversify broadly

The standard advice to buy an index, stay diversified, and not try to pick winners made intuitive sense when the public markets were where the action was. But the composition of public markets has quietly hollowed out.

In the US, the number of listed companies peaked around 8,000 in the late 1990s. It has since fallen below 4,000. In Australia, ASX market capitalisation as a share of global market capitalisation fell from 2.1% in 2013 to 1.6% in 2023, according to ASIC research published in 2025. Australia ranked 22nd out of the world’s 30 major stock exchanges for returns in 2025, behind South Korea, Hong Kong, Canada, Japan, and the United Kingdom. This is largely because of the ASX’s concentration in what Wilson Asset Management has called ‘old world industries’: banks, miners, and energy.

Meanwhile, in the private markets, Andreessen Horowitz estimates there are over 100 Series B or later rounds per year for companies growing above 30% annually. In public software, internet, and fintech combined, fewer than five companies are expected to hit that growth rate in 2026. OpenAI and Anthropic alone are adding nearly half as much new revenue this year as the entire public SaaS universe, excluding the Magnificent Seven.

Diversification through a public index in 2026 doesn’t mean what it used to. It increasingly means concentrated exposure to a small number of mega-cap AI companies, most of which built their value in private markets before listing.

Old Rule #3: Access is the great equaliser

The implicit promise of public markets was democratisation: anyone with a brokerage account could own a piece of the world’s best companies.

That was mostly true for a long time, but less so now because the world’s best companies are no longer in the public markets.

The private capital ecosystem has grown to fill the gap. Venture capital assets under management in North America alone are expected to climb from US$1.36 trillion at the start of 2025 to US$1.8 trillion by 2029, per PitchBook. Sovereign wealth funds, endowments, and institutional investors have been quietly compounding in private markets for years. The question for everyone else is whether they have access to the same opportunity set.

For Australian wholesale and sophisticated investors, the answer is increasingly yes, through SPV or unit trust structures, secondary markets, and private markets platforms like NonPublic that source pre-IPO shares directly from shareholders of companies like SpaceX, OpenAI, Anduril, and Databricks.

Hamilton Lane, which manages over US$1 trillion in private markets assets, noted in its 2026 Market Overview that venture capital now provides access to a type of AI exposure that public markets simply cannot replicate. That access gap between what institutional investors can reach and what retail investors can typically access is the market inefficiency that private markets platforms exist to close.

The new rules

The new rules are not complicated. They follow from the structural shifts that have already happened.

Value creation now happens predominantly while companies are private, not after they list. The public market IPO is increasingly a liquidity event for early investors rather than a starting gun for growth. The companies shaping the next decade are building that value now, in private hands: AI, defence technology, robotics, aerospace, and frontier infrastructure.

The implication is straightforward for investors paying attention to where capital flows are actually going. Forge Global’s research shows that unicorns which went on to IPO between 2019 and 2025 generated median annual appreciation of 65.7% between reaching a US$1 billion valuation and listing. The investors who captured that appreciation were not the ones who bought at the IPO, but the ones who got in before it.

The new rule, in short, is this: access is alpha. And access, for qualified investors, has never been more available.

NonPublic provides Australian wholesale and sophisticated investors with curated access to pre-IPO and private market investments. To explore current opportunities including SpaceX, book an introduction call with our team.

This content is general in nature and does not constitute financial advice. Investing in private markets involves significant risk, including the potential loss of your entire investment. You should obtain independent financial advice before making any investment decision.