Private Take: Raising standards in the ‘new’ private markets

The private markets industry faces a fundamental tension as it rapidly expands access to traditionally exclusive investment vehicles. According to John Toomey, chief executive of HarbourVest Partners, the sector risks conflating increased product availability with superior investment outcomes—a distinction critical for institutional investors and family offices evaluating emerging opportunities in private equity, venture capital, and related alternatives.

Toomey's warning, published in Private Equity International, targets a specific concern: the proliferation of private markets products designed to capture growing demand from retail investors, wealth managers, and smaller institutions may come at the expense of rigorous portfolio construction and risk management. As the industry democratizes access to what were once reserved for mega-funds and ultra-high-net-worth investors, the challenge lies in maintaining underwriting standards, governance frameworks, and transparency mechanisms that institutional investors have come to expect.

The "new" private markets environment reflects both opportunity and risk. Broader participation expands capital availability for growth-stage companies and established private equity sponsors, but it also introduces investors with varying sophistication levels into complex, illiquid asset classes. Without sustained emphasis on standards—fund structure quality, manager selection, fee transparency, and performance accountability—the influx of new capital could generate mediocre returns that damage the industry's long-term reputation.

For institutional investors and family offices, this perspective underscores the importance of selective manager selection and portfolio construction rather than chasing product diversity for its own sake. The message is clear: in private markets, more does not automatically mean better.