Investment trends shift toward private markets as firms delay IPO
Writer: Mirella Franzese
September 2025 — American firms have seemingly lost interest in going public — now investors are eyeing private markets for higher returns and new opportunities.
According to a report by investment group Meketa Capital, the number of public companies in the U.S. has nearly halved since the late 1990s, after peaking at 8,000 in 1996. Increasing regulatory pressures and new private market opportunities meant that IPOs became less attractive over the years, especially as the 2012 JOBS Act increased the number of investors who could privately provide capital to a company.
“Less companies are going public, which means you can’t open a brokerage account and buy their stock,” said Wells Fargo Advisors’ Investments Managing Director Noah Rubin in an interview with Invest:.
While already in decline, IPO activity tapered off sharply after the 2008-2009 crisis, when the economy needed job creation and new opportunities for investors. Instead, an increasingly demanding regulatory landscape followed, which stalled recovery and profoundly hurt the IPO market to this day.
As Rubin notes, businesses today want to stay private partly because of the “headaches” of quarterly short-term estimates and higher reporting regulations, which are not completely unfounded.
Consulting giant PwC estimates that companies spend an average of $1 million or more annually in recurring costs by being public instead of private, including the expenses of accounting, legal, underwriting, and other services. Smaller companies also have to shoulder higher IPO costs, as those cut into bigger pieces of both their revenue and value.
This year, the new administration has made it a top priority to revitalize IPO activity after a tariff-related freeze in the spring. President Donald Trump recently urged the Securities and Exchange Commission (SEC) to revise its reporting rules so that public companies would not need to report every quarter, which could drive a significant shift in investor behavior.
In a statement to Reuters, SEC Chair Paul Atkins said that he is working on a proposal to increase the appeal of going public by “eliminating compliance requirements that do not provide meaningful investor protections, minimizing regulatory uncertainty, and reducing legal complexities in the SEC’s rulebook.”
“There’s now a demand for the average investor to get into private investments,” added Rubin, especially given the growing availability of private capital. “(It’s) not just stocks and bonds, (but)… real estate and private credits, digital assets, fine wine funds and art funds.”
In fact, globally, there are around 95,000 companies with revenues over $100 million, compared to nearly 10,000 public companies with the same revenues, according to financial services firm Hamilton Lane.
Institutional investors, in addition to individual investors, are also taking on more stakes in non-public positions, with 66% planning to raise their private asset allocations during the next five years, according to a survey by Nuveen.
Private equity firms, for one, have caught up to meet the growing interest in private markets from high-net-worth and institutional investors, according to Lester Pataki, managing director and regional manager for JPMorgan Chase Bank’s Commercial Banking Northeast division.
Pataki observed that there’s been a significant flow of private capital poured into the middle market and madcap segments over the past decade. “Private equity firms have increasingly invested in privately owned midsized companies, a shift that differs markedly from the landscape 10 or even five years ago,” he said in an interview with Invest:.
For Pataki, this trend presents both opportunities and challenges for businesses. “On the one hand, companies now have access to additional sources of capital for growth. On the other hand, privately owned businesses must navigate more options regarding their future, whether that involves selling to another company, going public, transitioning to the next generation, or selling to a private equity firm in whole or in part.”
However, the outlook for IPO activity is cautiously optimistic. Investment bank Morgan Stanley believes more companies will go public in early 2026 as sponsor exits pick up steam, as in the last three years, private equity firms have delayed IPOs because of high interest rates, borrowing costs, and lower corporate valuations.
Despite the anticipated return of public offerings and a potential loosening of regulations by the SEC, investment behavior has shifted, perhaps indefinitely, in favor of private assets, as economists expect a continued rise in private market fundraising.
For more information, please visit:
