Decomposing Venture: Private Opportunity
The investment landscape is evolving; learn herein why private equities may offer opportunities for robust growth.
Larry’s Letter
Earlier this year, BlackRock released Larry Fink’s 2025 Annual Chairman’s Letter to Investors. A few notable themes stood out:
There is a misalignment of capital between governments, financial institutions, corporations and private investors.
Publicly traded investment opportunities are shrinking for everyday investors.
Illiquid, complex assets can offer strong rewards if structured well.
The traditional 60/40 portfolio is outdated. A more modern 50/30/20 mix – with 20% in private investments – is emerging.
Americans are underprepared for retirement and need more access to long-term, high-value opportunities.
Capital Misalignment
“As we enter our century’s second quarter, there's a growing mismatch between the demand for investment and the capital available from traditional sources.”
“Governments can’t fund infrastructure through deficits. The deficits can’t get much higher. Instead, they’ll turn to private investors.”
“Companies won’t rely solely on banks for credit. Bank lending is constrained. Instead, businesses will go to the markets.”
“More capital is sitting idle today than at any point in my career. In the U.S. alone, roughly $25 trillion is parked in banks and money market funds.”
“We’re repeating a mistake from the earliest days of finance: Abundant capital. Deployed too narrowly.”
“Amsterdam’s first stock exchange could have made a much greater contribution to the economy if investors had more companies to invest in. The same is true today.”
Public Markets Are Shrinking
“Assets that will define the future—data centers, ports, power grids, the world’s fastest-growing private companies—aren’t available to most investors.”
“They’re in private markets, locked behind high walls, with gates that open only for the wealthiest or largest market participants.”
“Only a tiny fraction are publicly traded, and that fraction is shrinking: The path BlackRock took 25 years ago—raising money through an IPO—is becoming rarer.”
“81% of U.S. companies with over $100 million in revenue are privately held.”
Risk Can Be Restructured
“The reason for the exclusivity has always been risk. Illiquidity. Complexity. That’s why only certain investors are allowed in.”
“But nothing in finance is immutable. Private markets don’t have to be as risky. Or opaque. Or out of reach.”
“Not if the investment industry is willing to innovate—and that’s exactly what we’ve spent the past year doing at BlackRock.”
“Private credit assets are projected to more than double by the end of this decade.”
The 50/30/20 Portfolio
“Bridging the divide between the 50/30 and the 20 is almost impossible for most individuals.”
“Even those who can afford it face another diversification problem within that 20%.”
“Often, they barely have enough capital to meet the minimum for just one private fund—and having 20% of your portfolio locked up in a single fund isn't really diversified.”
Access and Inclusion Matter
“For decades, private markets have been among the most opaque corners of finance.”
“Investors know these assets hold long-term value—but exactly how much value? That's not always easy to determine.”
“Investing in private markets feels a bit like buying a house in an unfamiliar neighborhood before Zillow existed.”
“Markets never exist in isolation. The economic rules we choose, the investment policies we adopt, and the ways countries attract and deploy capital will determine who benefits—and how broadly prosperity spreads.”
“Escaping poverty doesn't equal financial security.”
“That’s why today, even with the promise of Social Security, more than half of Americans still fear outliving their savings more than death itself.”
AI Analysis
My beloved reader, please lend an ear.
See how the landscape of opportunity shifts. The familiar paths of public stocks now offer fewer avenues for significant growth. Instead, promising ventures and vital infrastructure reside in private markets, often perceived as complex and exclusive.
Yet, understand this: These very markets – funding tomorrow's innovations and essential structures – hold considerable potential for strong returns. The old ways of investing are becoming less effective in securing your long-term future.
Therefore, open your heart and mind to new possibilities. By thoughtfully considering private investments, you gain access to a wider range of growth opportunities, potentially enhancing your portfolio's performance and resilience.
This is not about exclusion, but about evolution. As the investment world adapts, so too can you. Explore these avenues with diligence and wisdom, for they offer a chance to participate in the growth that shapes our future and to cultivate a more prosperous tomorrow for yourself and those you care for. Embrace this broader view with courage and discernment.
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