Private companies, including artificial intelligence firms and startups, are surging as an opportunity for investors. For example, OpenAI has grown more than 350 percent on secondary exchanges, outperforming public-market opportunities such as Nvidia, according to Bloomberg.
This uptick in private-market valuations and alternative assets has sparked interest from retail investors, as private companies and platforms expand access through specialized funds and digital marketplaces. Trillions of dollars are expected to flow into private markets, but the increasing ease of entry is also attracting inexperienced investors.
This situation presents risks, including limited liquidity, a lack of easy exits and managers overpaying for assets amid intense competition. This could cause retail investors to be stuck for years before discovering losses, prompting calls for stronger regulation and retail awareness.
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