For decades, investing has been divided into two distinct worlds — the transparent, liquid public markets and the opaque, exclusive realm of private equity and venture capital. But as private companies stay private longer and amass vast sums of capital outside public exchanges, that separation is breaking down.
Morningstar and PitchBook have teamed up to reflect that reality with the US Modern Market 100 Index, a first-of-its-kind benchmark that tracks the 90 largest U.S. public companies alongside 10 of the biggest late-stage, venture-backed private firms. The index, launched earlier this year, aims to give investors a more complete view of the modern market — one where innovation and growth increasingly happen outside the public eye. In a recent webinar, Morningstar CEO Kunal Kapoor, along with Sandy Beharry, associate director of private market indexes and Eric Compton, director of equity research, joined PitchBook's Paul Condra, global head of private markets research, to discuss the new index.
“When companies used to list earlier in their lifecycle, public benchmarks gave you a complete view of the economy,” Sandy Beharry said. “But the markets have evolved.”
Today, companies take an average of 12 years to go public, double the average from a decade ago. During that time, many raise billions privately — sometimes eclipsing what they could have achieved through an IPO. Beharry noted OpenAI’s $40 billion private funding round earlier this year, “twice the size of the largest IPO in history,” as a vivid example of how innovation is increasingly taking place outside public markets.
“In 2000, privately held venture-backed companies made up maybe 1% of the total equity market,” she said. “Today, that number is somewhere between eight to 10 percent. That is not fringe anymore. That is a material shift.”
Despite this shift, most benchmarks remain anchored in public markets alone. “Benchmarks are incomplete,” Beharry said. “They are no longer representing what the full investor opportunity set is.”
The US Modern Market 100 Index aims to change that by combining both public and private market leaders into a single, unified measure of market performance — a tool that captures how capital formation and innovation now span both sides of the investing spectrum.
For Paul Condra, Global Head of Private Markets Research at PitchBook, the new index reflects a growing demand among investors — particularly individuals and wealth clients — to access private-market growth stories.
“On the institutional side, you’ve had a lot of that hybrid investing for several years,” Condra said. “But what’s new this time around is really trying to tap into the retail side and the wealth side.”
He sees the index as a bridge for financial advisors and clients to understand what exposure to late-stage startups could look like. “It’s one way that a financial advisor can go to their clients and say, ‘Look, if you actually put a little of your portfolio into late-stage startups, this is kind of what your performance is going to look like relative to what you did if you just kept it all in public equities.’”
That clarity could help expand access to an asset class once limited to institutional players. “There’s real demand on the retail side to get more exposure to that,” Condra said. “And so there’s more interest to find these types of private market vehicles and ways to get exposure through traditional wealth channels.”
Still, private markets come with risks — illiquidity, limited pricing data, and sparse disclosure. Kunal Kapoor, CEO of Morningstar, asked whether this push into privates might expose retail investors to hazards that institutional players have long accepted.
Condra acknowledged the concern. “We just don’t have pricing on private assets on a day-to-day basis,” he said. “You can’t go to CNBC and look at the pricing history of a private company.” But, he said, “this is an interesting place where I think Morningstar can play an interesting role as a neutral, objective provider of information.”
To tackle the pricing gap, Beharry said Morningstar developed a model that integrates data from multiple secondary markets, which allow early investors and employees to trade shares before an IPO. “We’ve created a robust model that integrates multiple secondary market data sources,” she said. “We then calculate a single, consolidated market price on a daily basis for a private company that’s not only reliable but representative of real trading values.”
The early results have been encouraging. “When we look at the performance, the index has performed well over time, and it outperforms its benchmark as well,” Beharry said, noting private companies have been key drivers of that outperformance.
For Eric Compton, Morningstar’s Director of Equity Research, the index offers a window into where technological transformation is happening. “When I look at this index, the meta theme that jumps out is AI,” he said. “Over half of the private companies — OpenAI, Anthropic, xAI, Databricks — are AI-related. And the same is true on the public side with Nvidia and the hyperscalers.”
That concentration, he said, reveals how innovation increasingly spans both public and private companies — and how benchmarks must evolve to capture it. “You’re getting more access to earlier-stage companies, earlier in the innovation cycle,” Compton said. “It’s a different kind of diversification — not across sectors, but across maturity and innovation cycles.”
Beharry believes the US Modern Market 100 is only the beginning. “The US was a natural starting point because it has the most mature and deepest private market ecosystem,” she said. “But that logic applies globally as well. We’re focused on creating a global family of modern market indexes so investors everywhere can see the true picture of what a modern market looks like.”
Condra sees the next step in ETF innovation. “The thing with a blended index like the Modern Market 100 is you can’t own the constituents very easily,” he said. “So how do we create synthetic structures that give you that exposure through derivatives or options? That’s just another step along the path of ETF innovation.”
For Compton, the index marks a broader evolution. “On the retail side, it can be a catalyst,” he said. “It increases demand for private exposure and innovation in the products that make that possible. On the institutional side, it’s more of an acknowledgment of trends that have already gone on.”
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