Why Banks Fail at Secondaries
Noel Moldvai, CEO of Augment, on building the Robinhood for private markets
Banks keep failing at secondaries because this is not a standard brokerage product, it is a messy market ops business that sits on top of private company control. Every trade has to navigate transfer restrictions, right of first refusal windows, cap table sensitivity, and tiny fragmented blocks from employees on one side and institutions on the other. That is why specialists built around this workflow have lasted, while generalist bank desks often treat it like a cyclical side business and then pull back.
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The core frictions are structural, not just demand related. In open matching models, roughly half of deals can die after a buyer and seller agree, because the issuer can delay, block, or reshape the transfer. Older brokered trades could also take 3 to 6 months, which makes a desk hard to scale inside a bank that wants predictable throughput.
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Different platforms solved the mess in different ways. Nasdaq Private Market and Carta leaned issuer first, running controlled tenders. Forge used larger blocks and forward contracts for institutions. EquityZen used fund structures to pool smaller buyers and keep one line on the cap table. That variety is a sign the market is still too irregular for a bank to run with one generic playbook.
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The recent wave of institutional interest does validate the asset class, but it does not remove the expertise problem. Companies are more open to secondaries than they were a decade ago, yet the market is still fragmented by brokers, SPVs, issuer permissions, and bespoke process. That fragmentation is exactly what makes specialist operators valuable and makes bank desks hard to keep on strategy.
The next phase is less about whether banks want private market exposure, and more about who becomes the operating layer underneath it. Distribution is moving toward banks, wealth platforms, and RIAs, but execution is likely to stay with firms that know how to source supply, structure vehicles, and clear issuer friction. That favors independent infrastructure and specialist platforms over stop start in house desks.