The 7 Myths That Keep Beginners Out of Private Markets
You've heard the whispers. Private markets are for the ultra-wealthy. You need millions to get started. The risk is too high for ordinary investors.
These myths keep talented people on the sidelines.
I spent years in the Air Force managing procurement and logistics before transitioning to private markets. The discipline I learned there taught me one thing: complexity is often manufactured to keep people out.
Private markets aren't as inaccessible as you've been told. The barriers are real, but most of them exist in your head.
Here are the seven myths that stop beginners from entering private markets, and the truth behind each one.
Myth 1: You Need Millions to Start
The minimum investment myth is the biggest gatekeeper.
You've probably heard you need £10 million to access private equity funds. That used to be true. It isn't anymore.
Specialised platforms like iCapital have reduced minimum investments to £10,000-£25,000, well below the traditional £10 million threshold for closed-end funds. Moonfare launched an ELTIF with a minimum of just €10,000. Some infrastructure offerings now accept as little as £500.
The democratisation is real. According to Norton Rose Fulbright, the US Securities and Exchange Commission reversed a position it had held since 2002, allowing closed-end funds to invest more heavily in private funds and sell shares to both accredited and retail investors without the previous £25,000 minimum requirement.
The truth: Entry points have dropped dramatically. You don't need to be wealthy to start.
Myth 2: Private Markets Are Too Risky for Beginners
Risk exists everywhere. The question is whether you understand it.
Private markets actually offer some compelling performance data. Hamilton Lane, managing over £947 billion in assets, found that the majority of private market funds outperformed their public market equivalents in 19 of the last 20 years.
Buyout transactions outperformed global public equities in every vintage year by an average of 1,079 basis points. Private credit beat public leveraged loans in every vintage year by an average of 625 basis points. These figures are net of fees and carry.
Since 2000, private equity has generated a net annualised time-weighted return of 13%, according to MSCI Private Capital Solutions. Public equities (Russell 3000) generated 8% over the same period.
The risk isn't higher. It's different. You trade liquidity for potential returns. That trade-off works when you understand what you're getting into.
The truth: Private markets have a strong track record. The risk profile is different from public markets, not necessarily worse.
Myth 3: You Can't Access Your Money
Liquidity concerns are valid. Traditional private equity funds lock up capital for years.
But new fund structures are changing this.
As of December 2024, there were 257 closed-end funds (interval and tender funds) with total assets of £208 billion. Year-over-year net asset growth reached 29% for interval funds and 39.6% for tender offer funds.
Evergreen funds now allow investors to seek liquidity through monthly or quarterly redemptions. Blackstone raised £1.3 billion for Blackstone Private Equity Strategies, allowing up to 3% of assets to be redeemed each quarter. KKR was raising about £500 million per month for retail-focused strategies through its K-Series suite.
You still can't day-trade these investments. But you're not locked in forever either.
The truth: New fund structures offer more liquidity options than traditional private equity. You have choices.
Myth 4: Private Markets Are Only for Institutional Investors
This myth persists because it was once true.
Regulatory changes are opening doors. SEC Commissioner Hester Peirce remarked in June 2025 that "Commission rules and regulations along with Commission staff positions have contributed to keeping retail investors out of the private markets." She advocated for "more meaningful expansions" of the definition of an accredited investor.
The numbers tell the story. There are over 140,000 private companies globally with annual revenues of over £100 million, compared with approximately 19,000 public companies with the same revenues. As of late 2024, the US had about 35 million private companies and fewer than 4,000 public companies.
Private equity and venture capital-backed companies number nearly 25 times as many as public markets, yet their total capitalisation is just 12% of public markets.
The opportunity is massive. Access is expanding.
The truth: Regulators are actively working to broaden retail access. The institutional-only era is ending.
Myth 5: You Need Special Knowledge or Connections
Knowledge barriers are real. But they're not insurmountable.
A Bank of America study from 2024 revealed that 72% of US investors aged 21 to 43 believe it's no longer possible to achieve above-average returns using only traditional stocks and bonds. They're looking for alternatives but don't know where to start.
The education gap is the real barrier, not your network or background.
I came from military logistics, not finance. What I learned is that private markets operate on principles you can understand. Due diligence, risk assessment, portfolio construction. These aren't mysteries. They're skills you can develop.
Educational resources are proliferating. Platforms offer courses, webinars, and detailed breakdowns of investment strategies. You don't need an MBA or insider connections. You need curiosity and discipline.
The truth: Education bridges the knowledge gap. You can learn what you need to know.
Myth 6: Public Markets Are Safer and More Transparent
Public markets feel safer because you can check prices every second. That's not the same as being safe.
Retail investors accounted for 25% of total equity trading volume in 2021, nearly double the share a decade earlier. In February 2023, retail investors set a record for weekly inflows of £1.5 billion.
The results? Only 10-30% of retail investors make money through day trading every quarter.
Meanwhile, the number of private companies has increased by 43% over recent decades, whilst public companies have declined by 35%. Private equity-backed companies exhibit higher growth and better margins, on average, than publicly traded firms.
Transparency in public markets often creates the illusion of control. You watch your portfolio fluctuate daily, reacting to noise rather than fundamentals.
Private markets remove that temptation. You commit capital, trust the process, and evaluate performance over years, not minutes.
The truth: Public market transparency doesn't equal safety. Private markets offer different advantages.
Myth 7: The Industry Doesn't Want Retail Investors
This one has some historical truth. The industry built itself around institutional capital.
But the momentum has shifted.
According to McKinsey, private market assets under management totalled £13.1 trillion by June 2023, rising nearly 20% annually since 2018. Deloitte predicts that by 2030, US retail investors will narrow the gap with their European counterparts, reaching 75% of their retail private capital holdings.
Major players are building retail-focused products. The infrastructure is being built. Distribution challenges are being solved.
The industry sees retail investors as the next growth frontier. You're not an afterthought. You're the future.
The truth: The industry is actively pursuing retail investors. The welcome mat is out.
What This Means for You
Private markets grew from £4 trillion in 2013 to nearly £15 trillion a decade later. Some measures show the market has already hit £25 trillion.
This growth is accelerating, not slowing.
The myths that kept you out are dissolving. Minimum investments are dropping. Liquidity options are expanding. Regulatory barriers are falling. Educational resources are multiplying.
You don't need to be wealthy, connected, or specially trained to participate. You need to be informed, disciplined, and patient.
The question isn't whether private markets are accessible. The question is whether you're ready to learn what you need to know.
Start with education. Understand the basics of private equity, venture capital, and private credit. Learn how fund structures work. Study the risk-return profiles.
Then explore platforms that offer access at your level. Compare minimum investments, fee structures, and liquidity terms.
Private markets aren't a mystery. They're an opportunity that's finally opening up to people like you.
The barriers were always more psychological than real. Now even the real ones are coming down.
