Please stay tuned for important disclosure information at the conclusion of this episode.

Welcome to Investing Insights. I'm your host, Margaret Giles. Fund companies are looking to make private assets available to everyday investors, but investing in private companies comes with its own

set of risks. Morningstar's 2025 Outlook covers the convergence of public and private markets and

highlights the pros and cons of this trend. Jack Shannon, a senior manager research analyst for

Morningstar Research Services, is here to break down what products are available to retail investors

interested in private assets.

Plus, we'll discuss the challenges and opportunities for investors and what the future might have in store.

Well, thanks for being here today, Jack.

Happy to be back.

All right.

So before we get into anything, I want to start with the basics.

What are private assets?

So private assets, I think the easiest way to think about it is basically how the SEC in the United States views it.

So any security in the United States has to either be registered with the SEC or be exempt from registration.

When you register with the SEC, that means you have to do quarterly filings.

You have to do annual reports. You have to disclose a lot of information to the public. The reason you don't have to do quarterly filings, you have to do annual reports, you have to disclose

a lot of information to the public.

The reason you can be exempt from it is if you're only, say, raising money from accredited

investors and then you can be exempt from it.

And so generally when we're talking about private assets, we're talking about securities that

are exempt from public registration. Now, on the equity side, it's pretty cut and dry, right?

Do these shares trade on a national exchange or not?

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