The Takeaway
Value Creation Is Shifting Earlier in the Lifecycle: The corporate lifecycle has evolved, with companies achieving significant scale and generating substantial value while still private. SpaceX’s 24-year path to its IPO illustrates how much growth can occur before a company enters traditional public benchmarks.
Secondary Markets Are Now a Critical Bridge: Secondary markets have become an essential link between private and public markets, providing both liquidity and price discovery, with transaction volumes exceeding $240 billion in 2025.
Investors Risk Missing a Growing Share of Returns: As companies like SpaceX, OpenAI, Stripe, and Databricks scale in private markets, an increasing share of innovation and value creation occurs before reaching public benchmarks—creating a structural gap for traditional investors.
Index Design Must Evolve to Reflect Market Reality: Capturing companies across the public/private spectrum enables a more complete representation of today’s equity market. The Modern Market 100 Index demonstrates that incorporating private market exposure can enhance performance and better reflect where value is being created.
The equity market has evolved. As companies remain private longer and achieve unprecedented scale before going public, an increasing share of innovation, growth, and value creation now occurs outside traditional public-market benchmarks. SpaceX's historic 2026 IPO, following 24 years of growth in private markets and a valuation exceeding $1 trillion, exemplifies this shift. At the same time, rapidly expanding secondary markets have improved liquidity and price discovery for late-stage private companies, creating new pathways for investor access. This paper examines how these developments are reshaping the market portfolio and how the Morningstar PitchBook US Modern Market 100 Index seeks to provide a more complete representation of today's equity opportunity set.
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