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Last week, the Trump administration indicated it might issue an executive order to open the retirement market to private assets, significantly boosting shares of major private capital firms like Blackstone, Apollo, and KKR. This move could potentially channel hundreds of billions into the private asset market, which is projected by BlackRock to grow from $13 trillion to over $20 trillion by 2030. Institutional investors are decreasing their exposure to private markets, despite the growing interest in private assets.
The ERShares Private-Public Crossover ETF (XOVR) became the first ETF to hold a private company, adding SpaceX and seeing its assets surge to approximately $460 million. Despite a recent valuation increase of SpaceX holdings from $135 to $185 per share, the fund operates with unclear pricing mechanisms, raising concerns over transparency. Meanwhile, the KraneShares Artificial Intelligence & Technology ETF (AGIX) has gained 31.5% since its inception in July 2024, though it has attracted limited investor interest compared to its performance.
BlackRock, the largest asset manager, has invested nearly $28 billion in acquiring private equity firms and plans to launch a 401(k) fund with up to 20% allocated to private investments. The push toward democratizing access to private assets sparks debate over the associated risks, costs, and liquidity issues, with critics pointing to concerns like “volatility laundering.”
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