From public to private markets: What you need to know before switching investment careers
Key takeaways
- Transitioning to private markets requires a mindset shift to long-term ownership—focusing on cash flows, value creation, and risk-adjusted returns rather than short-term market pricing.
- Why does it matter now? Rapid growth in private markets is reshaping careers and industry revenues.
- Professionals must learn new structures, language, and investment frameworks to compete effectively.
Making the jump to private markets investing may seem daunting. But public markets professionals can get a head start by supplementing their existing skills with new technical know-how.
The rapid growth of alternative investments is reshaping not just investment portfolios but also careers. With private markets accounting for an ever-larger share of investment industry revenues, many experienced professionals are making the switch from public markets, corporate finance, real estate or wealth management.
It’s easy to see why. Private markets assets under management have expanded from just over USD3 trillion in 2008 to more than USD16.7 trillion in 2024, according to Preqin, which also projects the asset class will reach USD30 trillion in 2030. PwC estimates that private markets will generate more than half of global asset management industry revenues by that time, driven by private equity, private credit, infrastructure and real assets.
For experienced investment professionals, the transition is less about starting over and more about learning how private markets think differently about risk, value creation and time.
Private markets investing: Learning a new language
The most immediate challenge facing career switchers is not technical sophistication but the ability to talk about private investments with confidence. Private markets operate very differently to public equities and bonds, with terms and structures that are rarely taught in traditional finance education.
David A. Johnson, Principal at Endurance Capital Management, described this realization as the starting point of his own transition into private markets.
“Even for a Masters in Finance, you really don’t study private markets and alternative investments,” he said. “What I really got out of CFA Institute’s Private Markets and Alternative Investments Certificate was the vocabulary of the industry and understanding the choices of investments that were different from the public markets.”
Before formal study, Johnson said private markets felt opaque rather than inaccessible. “Before I studied for the Certificate, I was very confused about what all those terms meant – hedge funds versus private equity versus private credit,” he said. “After I acquired the Certificate, it was hard coded in my mind. I knew exactly what they meant, and I’ll know that for the rest of my life.”
For Johnson, an understanding of the available menu of private market strategies allowed him to identify gaps in his own portfolio and ask better questions of advisors and sponsors. Learning the structure of private markets – how capital is raised, deployed, governed, and exited – provided a lever for participation.
Learn more about our Private Markets and Alternative Investments Certificate.
From market exposure to ownership: a change in thinking
Understanding private markets requires more than knowing the asset classes. It requires learning to think like an owner.
In public markets, liquidity is typically readily available, and influence over corporate behavior is exercised primarily through indirect mechanisms such as voting, engagement and divestment, in line with stewardship requirements. In private markets, however, investors commit capital for longer periods and often exercise a degree of direct operational control. This changes how risk is evaluated and how value is created.
Martin Jarzebowski, CFA, Head of Thematic & Responsible Investing at Federated Hermes, describes this as a fundamental mindset shift.
“What’s interesting about private markets is that you truly have an ownership mentality,” Jarzebowski said. “The time horizons are much longer, and the amount of influence you have on the actual operations and day-to-day decisions of an entity gives you a completely different vantage point.”
This ownership mindset forces professionals to think bottom-up rather than relative to a benchmark. “A private markets investor needs to understand and evaluate themes that translate directly into the financial analysis of a deal,” he explained. “You have to think about what affects pricing power, capex needs, operating costs, liability exposure, and ultimately exit valuation.”
Grasping this way of thinking is especially important for professionals who are coming from public markets, where performance is often measured quarterly and positions can generally be exited quickly. In private markets, the stakes can be higher: decisions made during due diligence can shape outcomes over a decade or more.
This is also where sustainability and ESG considerations move from reporting to execution. Long holding periods and direct ownership mean private market investors are often more attuned to long-term environmental or social factors, making sustainability literacy a practical investment skill.
Real-world and long duration
Private market investments are usually illiquid and require capital to be committed for long periods. As a result, investors need to focus on whether their return expectations will hold up over time, how much protection exists on the downside, and how value will be realized by the end of the holding period. Short term price movements matter far less.
For Johnson, infrastructure investment was a turning point. “Infrastructure was the big ‘aha’ subject for me,” he said. “Infrastructure doesn’t have the volatility that I experienced in real estate, and that consistency really matters.”
Learning how infrastructure and other long-duration assets behave, how cash flows are structured and protected through contracts and regulation, and how returns compound over time helps professionals understand why private markets play a growing role in portfolios.
It also reframes risk by shifting the focus from short-term price volatility to the durability, predictability and downside protection of underlying cash flows.
“One of the biggest surprises was learning that private markets can offer enhanced returns and reduced volatility,” Johnson said. “I spent my whole life trying to do that in public markets, and suddenly it was obvious why private markets can deliver both.”
Looking back and ahead
Those who have already moved into private markets often say they wish they had started preparing for the transition earlier.
“There’s a compounding effect on financial education,” Johnson reflected. “The earlier you get exposed to the concepts, the more solid and useful they become over time.”
As the investment landscape grows more complex across both public and private markets, adaptability itself may be the most durable skill of all.
To learn more about private markets trends, explore these stories:
Unlocking talent for the new era in private markets
Private markets: Transparency will define the next stage of market development
How family offices balance emotion and strategy in private markets investing
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