The Democratization of Private Markets:

Expanding Access to New Capital Pools

Executive Summary

Private equity (PE) firms are at a pivotal moment. They are experiencing a slowdown in fundraising and facing stronger competition. To thrive, they must strategically engage with high-net-worth individuals (HNWIs) and defined-contribution (DC) retirement plans. This shift toward democratizing private markets presents a golden opportunity to expand access to alternative investments.

However, reaching this goal requires overcoming significant hurdles. Firms must navigate complex regulations, enhance investor education, and address operational challenges. Here, technology is vital. Innovations like artificial intelligence (AI), blockchain, digital onboarding, and wealth management platforms are essential tools for overcoming these obstacles.

This paper will illustrate how PE firms can harness digital innovation, refine their access models, and adapt to regulatory changes. By doing so, they can successfully grow their investor base in the private markets, paving the way for a more inclusive investment landscape.

New Access Models

Private equity firms are changing how they make capital available to reach more investors. A key strategy is to create investment options that are easier for everyday people to access, often working with well-known asset managers like Vanguard. These semi-liquid private equity exchange-traded funds (ETFs) allow individual investors to participate by lowering the minimum investment amounts and enhancing liquidity. Recent regulatory updates, such as changes to the Employee Retirement Income Security Act (ERISA), now allow private equity to be included in 401(k) plans, making it more appealing to mainstream investors.

Wealth managers are essential in this transformation, particularly when it comes to serving high-net-worth individuals (HNWIs). For example, Hamilton Lane is paving the way with evergreen and semi-liquid fund structures. These allow for ongoing subscriptions and redemptions that align better with personal liquidity needs. Often, these investment products include personalized advisory services aimed at educating investors and addressing risk management concerns.

Defined contribution plans also present a significant opportunity. With over $7.7 trillion in assets, 401(k) accounts have great potential to integrate private equity. Organizations are launching investment vehicles that meet fiduciary standards, giving access to previously restricted asset classes. Together, these new models show a strategic shift towards more inclusivity in private markets.

Key Technology Enablers

Technology is key to opening up private markets for everyone. Digital onboarding platforms like iCapital and Moonfare have changed how investors interact by making identity verification, regulatory compliance, and fund subscriptions easier. These platforms can handle a large number of individual investors, which is crucial for expanding access universally.

Artificial intelligence (AI) is increasingly important in linking investors with suitable private market opportunities. By analyzing financial profiles and preferences, AI tools provide personalized investment recommendations while helping to meet regulatory standards. This not only boosts efficiency but also builds trust among new investors.

Blockchain technology is revolutionizing how assets can be accessed through tokenization. By turning real estate or private equity assets into fractional digital tokens, firms can offer investments that were once out of reach for most people. The transparency and possibility for secondary trading make these investments even more attractive.

Additionally, digital wealth management solutions enhance investor engagement and understanding. Tools such as robo-advisors and AI-driven financial education resources simplify complex financial products, promote financial literacy, and create user-friendly experiences that resonate with a wider audience.

Regulatory Shifts

The regulatory environment is gradually evolving to support the democratization of private markets. Changes to ERISA have provided a safe harbor for fiduciaries seeking to include private equity options within DC plans, a crucial development for mainstream adoption. Additionally, the Securities and Exchange Commission (SEC) has expanded the definition of an accredited investor to include individuals with professional certifications or demonstrable financial sophistication. This broader definition increases the eligible investor base for private offerings.

Internationally, efforts are being made toward greater harmonization of private market regulations. While progress is uneven, initiatives like global fund passporting are beginning to reduce the friction associated with cross-border private fund distribution. These regulatory shifts collectively enhance accessibility while reinforcing investor protections.

The Challenges

Despite these advancements, barriers remain. Regulatory complexity challenges firms operating across jurisdictions with unique compliance requirements, creating operational overhead and risk.

Illiquidity is a natural part of private markets, and it can sometimes clash with the liquidity expectations of retail investors. This disconnect might discourage some from joining or create mismatched investment timelines. Additionally, there’s often a gap in investor education; many people may not have the knowledge needed to assess private investments effectively, which can heighten the chances of making uninformed decisions or feeling disappointed.

Operational scalability poses challenges. Private equity firms have structured operations for a few institutional investors. Extending these capabilities for thousands of smaller investors requires significant investments in automation, data infrastructure, and client services.

How Technology Can Help

Technology offers targeted solutions for democratization challenges. Digital onboarding and regulatory technology (RegTech) simplify compliance, lowering costs and speeding up investor activation. For instance, iCapital and DocuSign expedite Know Your Customer (KYC) verification and documentation management.

Blockchain-based solutions tackle the illiquidity challenge by making fractional ownership a breeze, opening up exciting opportunities for secondary market trading. Innovative real estate tokenization platforms such as Securitize are leading the way in this exciting new model, empowering investors to trade fractional units of assets that were once considered illiquid.

Firms are using AI tools to bridge investor education gaps through interactive learning and personalized content. These tools simulate portfolio outcomes, assess risk profiles, and clarify complex structures. The aim is to empower retail investors with confidence and clarity.

Operationally, automation and AI-driven customer relationship management systems enable firms to scale without sacrificing quality. Integrated platforms that combine CRM tools with AI analytics (such as Salesforce with Einstein AI) facilitate personalized service delivery, predictive engagement, and proactive compliance monitoring.

Quantifying the Shift: Case Studies & Data

Real-world examples underscore the momentum behind private market democratization. Blackstone's BREIT, a semi-liquid real estate investment trust, has amassed over $60 billion in assets under management, fueled mainly by individual investors accessing the fund through wealth platforms. Similarly, Hamilton Lane has established a global evergreen fund platform managing more than $1 trillion in assets, explicitly tailored for affluent retail investors.

Platforms like iCapital have emerged as foundational infrastructure for this transition, enabling access to alternatives across more than $170 billion in assets and serving over 8 million end clients. Industry analysts expect these trends to accelerate. According to Preqin, allocations to private markets from HNWIs are projected to grow by 32% by 2028, outpacing institutional growth.

These data points illustrate rising interest and a tangible reconfiguration of market dynamics. Technology, regulation, and innovation are converging to reshape private equity distribution models at scale.

Conclusion

Democratizing private markets is no longer a theoretical ambition but an operational and strategic imperative. The fusion of digital innovation, evolving regulatory norms, and investor-centric platforms enables a transformation that empowers a new class of investors. For private equity firms, embracing this change means capturing new capital pools, fostering deeper client relationships, and future-proofing distribution strategies. As the democratization trend matures, it will become a cornerstone of modern wealth creation, reshaping the future of asset management for generations to come.

About the Authors

Nic Paluseo

Capital Markets Partner, Wipro Consulting

Nic Paluseo is a seasoned Consulting Capital Markets Partner with over 20 years of experience as a global executive leader. His expertise lies in sales, execution, and strategy in Capital Markets, particularly Alternative Investments. Nic has served as a strategic advisor for Wipro "metal" Capital Market accounts and led the Alternative Investment GTM strategy. With a strong background in sales and trading, as well as management consulting, he has made significant contributions to top firms, including global transformation projects for leading PE firms and tier 1 global banks. Nic's responsibilities include business development, go-to-market strategy, risk management, regulatory compliance, general management, marketing, recruitment strategy, talent development, and customer retention. He holds a Master of Business Administration (M.B.A.) from Fordham University and earned his Bachelor of Arts (B.A.) degrees in Finance from the University of Rhode Island.

Trevor Williams

Vice President, BFSI

Trevor Williams is a senior strategic advisory and results-driven finance executive with over 25 years of experience. He serves as the global practice leader for the PE Cluster and Alternative Investments at Wipro. Prior to Wipro, Trevor was the North America capital markets lead for Capco. With an industry leader at Goldman Sachs and as a management consultant, Trevor brings a wealth of experience to his role. His expertise includes site reliability engineering (SRE), DevOps, legacy app modernization, cloud migration, machine learning, cybersecurity, and blockchain.

Thomas Crawford

Manager, Wipro Consulting

Thomas is a Manager in the Securities and Capital Markets domain, known for spearheading initiatives that enhance operational efficiencies and client experience in the private equity and alternative asset management sectors. His role supporting account executives at a leading US bank ensures meticulous delivery of client requirements and staff fulfillment. Thomas has played a pivotal role in developing Wipro's alternative investment capabilities, identifying key intervention areas and winning significant business across the Banking and Financial Services Industry. He joined Wipro as part of the G100 program after receiving his MBA from NYU Stern School of Business.