Wealth managers are steadily increasing client allocations to private markets, but the infrastructure supporting those allocations has not kept pace, according to Corastone chief executive and co-founder Rashad Kurbanov.
Kurbanov's company works with major Wall Street firms including Morgan Stanley, Fidelity, KKR and Apollo, building permissioned blockchain infrastructure designed to help private market products scale across wealth platforms.
Asked what is preventing private assets from scaling more broadly, Kurbanov told InvestmentNews that it’s about outdated systems rather than a lack of appetite among advisors or clients.
"The biggest challenge is that existing private market infrastructure is not built for scalable distribution. Much of the existing infrastructure was built for a different era,” he said. “Most administrative processes still require manual documentation, bespoke integrations, fragmented data and workflows that require multiple parties to reconcile the same information across different systems.”
He said that model breaks down once wealth managers try to extend private market access beyond a small pool of large institutions.
"That model works when volumes are limited and participation is concentrated among large institutions, but it becomes much harder when wealth managers are trying to deliver private market exposure to a broader client base,” he said. “Subscriptions, capital calls, reporting, transfers, valuations and servicing events all create operational complexity. If those workflows are handled manually, firms face higher costs, slower processing, more exceptions and greater operational risk.”
For Kurbanov, the constraint is not demand or product quality but whether firms can support that demand operationally.
"The issue is not advisor demand or product quality. The issue is whether the operating model can support that demand without adding unnecessary friction. To scale private markets across wealth platforms, the industry needs shared, standardized infrastructure that allows participants to transact, exchange data and manage lifecycle events with the same level of control and efficiency that investors expect in public markets," he said.
With partners spanning asset managers, wealth platforms and fund administrators, Corastone sits across several parts of the private markets ecosystem. Asked what common problem those institutions are trying to solve, Kurbanov said scalability sits at the centre of it.
"Asset managers want to reach more investors. Wealth platforms want to expand access while maintaining control over suitability, reporting and the client experience. Fund administrators and transfer agents want to process higher transaction volumes without relying on manual workarounds. Everyone is trying to solve a different part of the same problem: how do you make private markets easier to access, easier to administer and easier to manage across the full investment lifecycle?" he said.
He described Corastone's role as a neutral layer rather than a replacement for any single participant.
"That is why a neutral infrastructure layer is so important. We are not trying to replace any participant's role in the ecosystem. We are providing the connective tissue that allows those participants to work together more efficiently, while preserving their client relationships, operating models and regulatory responsibilities," Kurbanov said.
Corastone has built its platform on permissioned blockchain technology and Kurbanov believes this has advantages over traditional financial infrastructure.
"Corastone's private, permissioned blockchain technology provides all participants involved in a given transaction with a shared source of data, without requiring every participant to surrender control of their own systems," he said. "A permissioned network allows authorized participants to work from a common data layer, with clear rules around access, controls and auditability. That can reduce reconciliation breaks, remove duplicative data entry and support straight-through processing across workflows that have historically been handled through PDFs, spreadsheets, emails and file transfers.”
He named subscription processing, investor onboarding, data exchange, fund administration and lifecycle servicing as the areas seeing the earliest gains.
Corastone recently partnered with Franklin Templeton to launch Private Market Model Portfolios. Kurbanov said the structure fits how many advisors already build portfolios, rather than asking them to adapt to a separate process for private assets.
"Model portfolios can be a major step forward because they fit the way many advisors already build and manage client portfolios. Historically, private markets have often been treated as a separate allocation requiring a separate subscription, separate reporting and a separate operational process. That creates friction for advisors and makes it harder to incorporate private assets consistently across client portfolios," Kurbanov said.
"By supporting a single-subscription, SMA-style structure, advisors can access diversified private market exposure within a professionally managed framework instead of navigating each underlying allocation separately. Over the next 18-24 months, we expect models and alternative products to be significantly more available in the SMA UMA model space than they are today," he said.
Advisor interest in private markets is often tempered by concerns over liquidity, reporting and operational burden. Kurbanov said technology cannot alter the underlying nature of private assets, but it can change how manageable they are to service.
"Technology cannot change the fundamental characteristics of private markets. These investments can be less liquid, more complex and more appropriate for certain investors than others. What technology can do is make the operational experience more transparent, controlled and manageable," he said.
"For advisors, better infrastructure can improve access to information, streamline documentation, standardize reporting and reduce the number of manual steps required to implement and service an allocation. It can also give wealth platforms and fund sponsors clearer visibility into transaction status, investor data and lifecycle events," Kurbanov said.
He said the impact on oversight and compliance is significant.
"When workflows are manual and fragmented, firms often spend too much time chasing documents, reconciling data and resolving exceptions. A shared, permissioned infrastructure can create a clearer audit trail, more consistent controls and better alignment between the parties involved in a transaction," Kurbanov said.
"The goal is not to make private markets look identical to public markets, but instead to make the operational layer more reliable, allowing advisors and platforms to focus on whether an allocation is appropriate for the client rather than fighting the mechanics of the process," he said.
Fidelity, Hamilton Lane and Future Standard have joined Corastone's ecosystem as investors. Kurbanov said that support reflects a broader industry shift toward shared infrastructure rather than firm-by-firm solutions.
"It signals a broader recognition that the future of private markets will depend on connectivity and standardization. The industry is moving beyond isolated technology projects and toward shared infrastructure. Private markets are becoming a larger part of wealth portfolios, but the operating model cannot remain fragmented if the industry wants to support that growth responsibly. Shared, permissioned infrastructure is a requirement for the future of private market distribution," Kurbanov said.
"No single firm can solve this problem alone with another proprietary integration. The market needs neutral rails that allow participants to connect once, exchange data securely and operate with greater efficiency. That is the direction I believe the industry is heading," he said.
Kurbanov expects private markets to become a standard part of wealth management over the next five years, provided the infrastructure supporting that growth keeps pace.
"Over the next five years, I expect private markets to become a more standard component of wealth management, particularly for clients who are suitable for these investments and understand the risks. The question is not whether demand will continue to grow. The demand is already there. The question is whether the infrastructure can support that demand in a way that is efficient, transparent and responsible, and model portfolios will help move the industry in that direction," he said.
"Technology platforms will play a central role by creating the operating foundation for that growth. The winners will be the firms that can make private market investing easier to access and administer without weakening controls, compliance or transparency. That is the balance the industry needs to strike," Kurbanov said.
He closed by tying the company's mission back to the operational frictions advisors face today.
"Our view is that private markets need an infrastructure layer that is purpose-built for the way these investments actually work. If we can reduce friction across subscriptions, reporting, servicing and lifecycle events, then wealth managers will be better positioned to offer private market exposure at scale while maintaining the standards their clients expect," Kurbanov said.
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