Morgan Stanley Buys Equity Trading Platform in Private Investment Push

Democratization is the word on the street in private markets, and Morgan Stanley knows it.

The investment bank has bought EquityZen, a company that lets investors buy and sell stakes in private companies. EquityZen bills itself as a way for investors looking to get into private assets to get in contact with equity shareholders of private companies. The deal will enable Morgan Stanley advisors to offer clients private investment opportunities in companies that aren’t available anywhere else. “Companies are staying private longer and longer,” EquityZen CEO Atish Davda said in an interview with Yahoo Finance. “The number of publicly listed companies continues to be at an all-time low, and so if you’re an investor only investing in public stocks, you’re missing out on where more value creation could be occurring.”

Put to (Morgan Stanley at) Work

It’s all part of a private markets trend that is seemingly taking over wealth management. In 2019, Morgan Stanley acquired Solium Capital, a Canadian software-as-a-service platform, and rebranded it as Shareworks; it has been used by private companies since 2021 as an equity compensation platform. Shareworks is part of Morgan Stanley at Work, which offers both public and private companies’ employees retirement plans, financial education tools and other services. The deal will increase their access to private shares and give Morgan Stanley at Work participants more liquidity options, according to a release. Terms of the deal were not disclosed.

“[Morgan Stanley has] been servicing private companies for a very long time,” Davda said. “The piece that’s been missing is the piece that connects all of that supply to the demand side.”

More Privates Please. The deal is also representative of the broader goal of democratizing access to private investments across wealth management. Last year, BlackRock folded in data on some 200,000 private investments in a $3.2 billion deal with UK-based data and analytics firm Preqin, and demand for the asset class has been rising. Part of the allure is accessing the more than 95,000 private companies that have annual revenues of over $100 million, compared to the roughly 10,000 publicly listed ones, according to research from Russell Investments.