Private Market Investments in the UK: Access, Risks and Due Diligence

What counts as a private market investment?

Private market investments come in several broad forms:

• Private equity — ownership stakes in companies that are not listed.
• Venture and growth capital — investment in earlier-stage businesses.
• Pre-IPO investments — capital raisings ahead of a proposed listing.
• Private credit — loans made to businesses or projects outside the banking system.
• Unlisted property and infrastructure — real assets held through unlisted funds or trusts.

How private markets differ from public markets

Disclosure. Listed companies are subject to continuous disclosure obligations. Private companies generally are not, so investors may have access to less information and it may be harder to verify.

Valuation. Listed investments have a market price every trading day. Private investments are typically valued periodically, often using models or recent transaction prices. These valuations can lag market conditions and may not reflect the price a buyer would actually pay.

Liquidity. Private investments are generally harder to sell. Investors may need to hold them for years, and exit may depend on an event such as a sale of the company or a listing.

Access. Some opportunities are restricted to professional, high-net-worth or sophisticated investors under the applicable rules. Minimum commitments and eligibility vary between offers; meeting a minimum investment amount does not, by itself, establish eligibility.

Who can access private market investments in the UK?

There is no single eligibility rule covering every private investment. Check the offer's intended investor group, the country in which it can be promoted and the classification required before considering an application. Do not assume an investment is available to every UK resident simply because information about it is online.

Glenmorgan's existing fund-access process confirms country of residence and investor eligibility before an investment can proceed, and provides the full fund documentation for review. An enquiry or account application is not confirmation of eligibility or a commitment to invest. This guide describes investment categories, not a list of currently available offers.

Why investors consider private markets

Some investors consider private markets to access businesses and assets that are not available on public exchanges, to broaden diversification, or to pursue potential returns linked to the growth of private companies. Private credit may be considered by investors seeking income, although it carries credit and liquidity risks.

These potential benefits come with trade-offs. The same features that make private markets different — less disclosure, less liquidity and less frequent valuation — are also sources of risk.

Due diligence matters more

Because information is less standardised, due diligence plays a larger role in private markets. Investors commonly look at the quality of the business or assets, the experience of the managers, the terms of the investment, fees, reporting arrangements and exit pathways. Understanding what happens if things do not go to plan is as important as understanding the potential upside.

Read the liquidity terms, not just the intended exit

A direct holding in a private company and an interest in a private fund have different exit arrangements. Company shares may be subject to transfer restrictions and depend on finding a buyer. Fund units may have a lock-up, notice period or scheduled redemption dates, and withdrawals may be limited or suspended. A planned company sale or IPO is not a guaranteed exit.

For example, an investor expecting to use money for a property purchase could face a shortfall if a private investment cannot be sold when needed. A periodically reported valuation does not mean that amount is immediately available in cash. Compare the binding withdrawal terms with your own spending needs, rather than relying on an expected timetable.

Understand the total costs and valuation process

Ask for management, performance, administration and transaction charges, together with any entry or exit costs. Establish whether an illustrated return is before or after these charges. For a fund, also check when fees are charged and whether further capital commitments could be requested under its documents.

Ask who values the assets, how often valuations are updated and what assumptions are used. Less frequent valuations can make reported values look steadier than listed prices without removing the underlying economic risk. Consider how borrowing, concentration and changes in market conditions could affect both the valuation and the eventual sale price.

Questions to resolve before committing

Request written answers and check them against the offer documents:

• What legal interest am I buying, and who is the issuer, manager and administrator?
• Am I eligible for this particular offer, and which country's rules apply?
• How will my money be invested, and how concentrated or leveraged is the strategy?
• Can I sell or redeem, what restrictions apply, and what happens if the intended exit is delayed?
• What are the total fees, reporting arrangements and possible additional commitments?
• Which investor protections, if any, apply to this specific investment and provider? Do not assume compensation-scheme coverage.
• Could I absorb a full loss without affecting essential spending or near-term plans?

A measured allocation

Private market investments are generally considered as a portion of a broader portfolio, sized with regard to the investor's liquidity needs and tolerance for uncertainty. This article is general information only and does not constitute financial advice.