Private Markets 3.0

Introduction

Private markets crossed $14 trillion in assets under management in 2025, and the path ahead points toward $25 trillion by the end of the decade. Growth at that scale requires the industry to handle far more complex data and information flows across a far wider set of participants. That trajectory demands a shift in how data and information move across the ecosystem, from human intermediaries toward computer processing, and the infrastructure to support that shift is now being built.

Where private markets stands today

Information in private markets still moves by analog means, with a human intermediary sitting at every handoff. Data is packaged into documents, usually spreadsheets and Word files, which are often converted into PDFs for distribution, and those documents are sent between counterparties by email. On arrival a human reads, checks, and verifies the data, extracts the relevant figures, and inputs them into the recipient's own applications. From there the data feeds further workflows, which are largely standardised because every recipient knows what needs to happen on arrival unless something is wrong.

A single set of figures often passes through four or five sets of hands before anyone is done with it, and is re-entered into different applications at every stage. Consider a quarterly reporting cycle in private equity. A portfolio company produces its quarterly financials in an Excel model and emails them to the manager. At the manager, an associate receives the file, checks the new numbers against the existing figures in the firm's portfolio management tool, and updates the valuation model with revised assumptions. An external valuer is engaged to opine on the fair value, and after some iteration, the manager and the valuer agree a figure. The agreed fair value then flows to the fund administrator, which combines it with fund-level activity to produce the capital account statements and financial statements for each investor, distributed as part of the quarterly email package. Investors read the documents, extract the figures relevant to them, and input those figures into their own monitoring applications, where the same data then feeds governance, internal reporting, and oversight activities.

Any well-run firm can handle a quarterly close. The operational work at any single point in the chain is manageable. The issue is that this pattern repeats at every participant, managers with their administrators, administrators with their investors, investors with their own internal applications, lenders with their borrowers, and at every stage the same activities are being performed: reading, checking, and re-entering the same information into yet another application. Rolled up across the industry, these activities occupy a significant portion of its working hours. As more capital enters and more participants are added, there is more of the same work to do, and as the industry layers on more complex structures and reporting requirements, the work per interaction increases as well. We call this the Friction. Every firm in the chain does the same operational work of extracting and reconciling information that the firm before it has already extracted and reconciled, and the collective weight of that duplication grows disproportionately as the industry adds more participants, more vehicles, and more complexity.

The Friction is addressable because the work underneath it is consistent. Despite firms across private markets using different terminology and operating different structures, the underlying processes and workflows are largely the same. A manager and its fund administrator know what data needs to move between them each quarter and how that data translates into the reporting each investor receives. Investors know what information is coming and when. Lenders and their borrowers know what covenant data is expected and on what schedule. That consistency is what makes standardisation feasible.

Email has been the Swiss Army knife of all of this. It transports the data, wrapped in documents. It coordinates the workflow, signalling to each party what they should do next and when. And it creates the audit trail that records what was sent, what was approved, and what happened along the way. Email has been present at every stage because it has been the only medium capable of handling all three functions across firm boundaries. It still works, and will continue to have a place for the ad hoc and the bespoke, for the communication that cannot be anticipated in advance. What has changed is that specialised tools can now handle each of these functions on their own, more efficiently, and the bulk of the industry's routine work is ready to move to them.

What the ecosystem looks like connected

Consider the same portfolio company reporting cycle, with the human intermediary removed from the routine operational work. New financials are prepared at the portfolio company. An associate at the manager reviews them, and with a single action, the validated data is released to the counterparties who are authorised to receive it. It arrives in the investors' own applications as structured data, ready to be ingested directly into their monitoring and reporting environments, without a document needing to be opened, read, or re-entered. The investor's applications already know what to do with it, because the format and the meaning of each data point were agreed in advance.

The same logic applies across the rest of the network. Valuations flow to investors at quarter end without manual compilation, and capital call notices execute as structured messages that interact directly with investors' treasury applications. Covenant data moves from borrowers to lenders as a continuous feed rather than a quarterly report. The three functions that email currently handles, transporting data, coordinating workflows, and recording what happened, are each served by purpose-built infrastructure. Data moves through shared standards, and workflows are automated where the work is routine, with one step triggering the next across firm boundaries. The record of what was sent, approved, and acted on is captured as the work happens rather than reconstructed from email threads. Human attention is reserved for the decisions that require it.

Private Markets 3.0 is the next operating model for the private markets industry. Data and information flow directly between counterparties. Workflows are automated across firm boundaries. What changes is the operational work between the agreements and the outcomes. Everything else remains.

Why this matters

When the Friction is reduced, several things become possible.

The most immediate is scale. Today, every time a manager adds a new fund, a new investor, or a new portfolio company, the operational work of servicing them grows accordingly, because each addition brings its own reporting requirements, its own data to process, and its own counterparties to coordinate with. A human intermediary sits at every one of these handoffs. McKinsey research has noted that as private markets firms expand across asset classes and geographies, support functions become a larger share of operations, inducing diseconomies of scale even for the largest managers. The industry is profitable enough that operational cost is rarely the binding constraint, but complexity is. Reading documents, extracting figures, checking them against what the recipient already holds, and entering them into applications, all of this is repetitive, structured activity that machines handle well. When machines handle it, removing the human intermediary from routine operational work, the difficulty of each additional fund, investor, or portfolio company falls, and the industry can grow without the proportional increase in headcount that currently accompanies each increment of scale.

The Friction is real enough that an entire market has formed around managing it. Specialist service providers extract figures from PDFs and enter them into managers' applications on their behalf. Technology firms offer automated document extraction, reading and structuring data from quarterly reports that arrive in dozens of different formats. These services are valuable today because the underlying complexity persists. Shared standards and interoperability between applications are what make these services unnecessary over time, by moving structured data directly rather than extracting it from documents after the fact.

The same shift in how data moves also changes what the industry can offer. The experience of being an investor in a private markets fund is today defined by quarterly reporting cycles, static PDFs, and limited visibility into holdings between those cycles. When data flows between counterparties as structured information rather than documents, better products become possible. Real-time or near-real-time visibility into holdings, granular drill-down at the portfolio company level, and reporting tailored to what each investor wants to understand.

These operational economics also reshape who the industry can serve. Private markets has historically been an asset class for institutional investors, with selective participation from the largest family offices and high-net-worth individuals. Much of the reason is operational. Servicing an investor, onboarding them, producing their reporting, handling their queries, requires a human intermediary at every stage, and the cost of that intermediary is roughly the same whether the investor commits $500 million or $5 million. The industry has evolved around the assumption that each investor's commitment is large enough to justify the headcount required to service them, which has effectively set a floor on who can participate. When machines handle the bulk of that servicing, the cost of each additional investor no longer scales with headcount in the same way, and commitments that were previously too small to justify the operational work become viable. The Deloitte Center for Financial Services has projected that, should recent trends continue, retail investors' allocations to private capital in the United States alone could grow from an estimated $80 billion to $2.4 trillion by 2030. Serving that volume of smaller investors is only feasible with infrastructure that breaks the link between the number of investors served and the number of people required to serve them.

These consequences reinforce each other. Better products attract a wider set of participants, a wider participant base brings more capital, and more capital strengthens the case for the coordination that reduces the Friction further.

How it is already starting

The shift is underway, unevenly and in pieces, across different parts of the private markets industry. Document exchange is still where most of the industry operates, and the most visible progress is in standardising those documents.

At the reporting end of the fund lifecycle, ILPA released version 2.0 of its Reporting Template in January 2025, alongside a new Performance Template that is the first of its kind in the industry. Both are being implemented from Q1 2026. The Reporting Template replaces the 2016 version that had become the de facto standard for how managers report fees, expenses, and carried interest to investors. The Performance Template standardises the calculation of return methodologies, an area where inconsistency has been a long-standing source of friction between managers and investors. At the transactional end, the trade body now known as UK Private Capital (formerly the BVCA) has been publishing and updating model legal documents for early-stage venture capital investment, most recently in February 2025, with the explicit purpose of letting investors and entrepreneurs focus on deal-specific matters rather than renegotiating standard terms, and the principle is the same across both ends of the lifecycle. When the documents are standardised, the data definitions inside them become consistent, and once the definitions are consistent, the data can move between applications directly rather than being locked inside a document that someone has to open, read, and re-enter.

That is what the next layer of infrastructure is being built to do. In March 2026, Intercontinental Exchange and Apollo announced the launch of ICE Private Credit Intelligence, a data infrastructure platform designed to bring standardisation, permissioned data sharing, and analytics to the private credit market. Apollo's own head of capital solutions described it as a foundational data layer for private credit, explicitly intended to enable participants to transact in a way that mirrors the public credit experience. Separately, the London Stock Exchange Group launched its Digital Markets Infrastructure platform for private funds in September 2025, built on Microsoft Azure, designed to digitise the full fund lifecycle from issuance and distribution through to settlement and servicing. Both are infrastructure plays by major market institutions, building shared layers that multiple participants can connect to.

Some participants have already moved beyond industry-wide coordination entirely. Some of the largest institutional investors in the world have begun requesting direct data feeds and structured access from the managers they back. A growing number of managers are making the same request of their fund administrators. These are bilateral arrangements that bypass the document layer, driven by participants who have the scale and the leverage to set the terms on their own.

What it takes

The bilateral arrangements between the largest participants work for those participants, and they point the direction for the rest of the industry. What scales beyond bilateral is shared infrastructure, and building it requires coordination. ILPA's reporting templates, ICE and Apollo's data platform for private credit, and LSEG's fund lifecycle infrastructure each required multiple participants to agree on how information should be defined, structured, and shared between them.

Cross-industry coordination is the real work, and it is underway. It requires participants who have historically interacted through documents and email to agree on how data should be defined, structured, and permissioned as it moves between them. This is largely an organisational challenge rather than a technical one. The tools and disciplines needed to move structured data between counterparties, from data engineering through to interoperability standards, have matured considerably over the past decade. What is emerging now is the industry-wide willingness to agree on what to move, in what form, and under whose authority.

There is a precedent worth considering. In the early 1990s, Fidelity and Salomon Brothers wrote a shared format so that their applications could exchange equity trade data. The format was open and useful enough that others adopted it, and over the following decade it became the FIX Protocol, which now underpins global public markets trading. The organisational choices were the difficult part. What made FIX work was that it began as a practical agreement between two participants with a real problem to solve, and grew through voluntary adoption as others recognised the same problem in their own operations.

Private markets now stands at the beginning of a comparable process. Industry bodies, technology firms, service providers, and practitioners all have roles to play. Some of the work is happening through existing organisations, as with ILPA and UK Private Capital. Some is happening through commercial infrastructure plays, as with ICE and LSEG. Some is happening bilaterally between counterparties with enough leverage to set the terms. What connects these efforts is that they are building the same thing from different directions, and the more of them that adopt compatible approaches, the more the whole network benefits.

The networks already exist. The connective tissue is being built, and building it requires sustained effort from participants who have day jobs making investments, managing funds, and servicing clients. The rate at which private markets moves depends on how many participants choose to engage with the work.

Author,

Sean Henney

Founder of Private Markets Technology