Behind Schwab’s $660M Deal for Private Asset Marketplace Forge

Inking a deal for private markets platform Forge was apparently just too Schwabvious to ignore.

The massive retail brokerage Charles Schwab says the $660 million deal, announced last week, will help improve liquidity and transparency in private market investments. The brokerage firm that pioneered discount stock-trading will soon be offering shares in some of the world’s most dazzling unicorns — like Anthropic, OpenAI and SpaceX — all available to retail investors, advisors and institutions. 

“We’ve created a whole bunch of ways for clients to manage and create diversified portfolios,” Schwab CEO Rick Wurster told Advisor Upside at the Schwab Impact conference in Denver last week. “It’s an underwritten story about how much the industry has innovated around those topics. It may not be as glamorous as prediction markets and sports gambling, but I think a lot more impactful.”

Forging Ahead

Forge already has 636,000 registered users, and more than 4,700 companies are available on the platform. However, fees can run from 2% to 4% of the total transaction size, with investment minimums starting at $5,000, according to Forge’s website. As public markets continue their impressive bull run, advisors are clamoring to ensure clients are as diversified as possible, said Jon Beatty, head of advisor services at Charles Schwab. 

“Companies are staying private longer, and so the opportunity is there [for advisors] to participate in those organizations, to express their views of the economy, and the investment theses that they develop for their clients,” he told Advisor Upside at the conference.

Private investing may become a staple in client portfolios, not to mention a gold mine for asset managers and brokerages alike. By 2030, retail investors’ allocations to private capital in the US could skyrocket to $2.4 trillion, according to a recent report by Deloitte. Just last month, Morgan Stanley agreed to buy EquityZen, a company that offers similar private-stock investments. They’re hardly alone:

• Goldman Sachs acquired the venture capital firm Industry Ventures last month in a move CEO David Solomon said would strengthen its relationships with ultra-high-net-worth clients.  
• BlackRock snagged New York-based private-credit manager HPS Investment Partners in an almost $12 billion buyout in December.

Private or Not. The Forge deal notwithstanding, Schwab’s recent growth has been staggering, with much of it being fueled by the company’s wealth business. “We’re the leading custodian; there’s not really a close second,” Wurster said, adding that the segment grew 40% year over year through the third quarter. “What we can bring to the advisors is unmatched on the wealth side, and that has been a source of significant growth for us.”