About half of investment professionals believe there’s room for improvement in private market practices, while a quarter of these professionals believe there are substantial problems or even market failures, according to a survey from the CFA Institute.

Published Wednesday, the survey revealed that 51% of investment professional believe some practices could be improved but problems in private markets are not significant, 24% believe there are substantial problems or even market failures, and 17% believe private markets function well.

The survey was conducted in October 2023, after the U.S. Securities and Exchange Commission adopted sweeping changes to the private funds industry. The new rules, which were recently struck down by a U.S. appeals court, received mixed reviews from industry players.

Private markets can seem like a polarized landscape with often sharply divergent policy views, but the research reveals a missing middle ground among investment professionals, said Stephen Deane, senior director of capital markets policy with the CFA Institute.

“A majority of [our] members surveyed took a moderate position,” Deane said in a release. “While they believe room exists for improvement in private market practices and limited new regulation, they also say that problems are not significant, do not represent a market failure, and do not call for drastic new regulation.”

Top concerns

The institute asked its members how well private markets are functioning.

Thirty-seven per cent of respondents said there are substantial problems, or even market failures, around the frequency and accuracy of valuation reporting. Another 47% said some valuation reporting practices could be improved, but problems are not significant, and 10% said private markets function well in this regard.

As for the frequency, comparability and accuracy of performance measures, 35% said there are substantial problems, 49% said there is room for improvement and 8% said private markets function well in this regard.

Asked about the fairness and transparency of fees, 26% said there are substantial problems, 50% said practices could be improved and 16% said private markets function well in this regard.


The survey also included questions about a variety of policy issues. A slim majority of respondents (52%) said they support new regulations, but limited ones, for private markets.

About 70% supported quarterly statements that include information on the private fund’s fees, expenses and performance, while 79% expressed support of an annual financial statement audit of the private fund performed by an independent public accountant.

As well, 61% supported a fairness or valuation opinion of any adviser-led secondary transaction.


The CFA Institute said the purpose of the report is neither to tout nor condemn private markets, but rather to provide “an even-handed, unbiased account of private markets that will advance public understanding.”

The non-profit also provided recommendations for investors and policymakers.

Recommendations for investors include doing due diligence when deciding whether to invest in a private fund, not being afraid to walk away from a deal if the terms seem too problematic or unacceptable, as well as being aware of internal agency conflicts and ways to address them.

Policymakers, on the other hand, should recognize the role for regulators; focus on transparency, conflicts of interest, fees and expenses and valuations; be cautious of expanding retail access to private markets; and resist temptation to weaken regulations for private markets, among other things, the organization said.

The CFA Institute conducted the online survey from Oct. 10–22, 2023. The global non-profit organization sent the survey to a random sample of 60,000 members— 20,000 in each of three regions: the Americas; Europe, the Middle East, and Africa; and Asia Pacific — and received 848 valid responses.

The margin of error of was plus or minus 3.4% at the 95% confidence interval.