The top 20 largest US public companies are investing around US$100-150 billion directly into private companies, providing investors with indirect access to private markets with less friction, according to Dimensional Fund Advisors.
Although direct investing in private capital markets is often hindered by transparency and liquidity constraints, the fund manager has argued that investing in public companies can offer a pathway to private market exposure without the traditional frictions.
According to the firm, many public companies already hold substantial stakes in private firms, with accounting data showing that the 20 largest US public companies invest roughly US$100 to US$150 billion directly in private companies.
While this represents a relatively small portion of total private equity and private debt investment, Dimensional said the exposure is significant enough that most public market investors likely already have some private market exposure through their current holdings.
It comes as private equity firm Harbourvest recently forecast that evergreen funds – an open-ended structure offering greater liquidity than traditional private equity – will surpass US$1 trillion by 2029, reflecting rising investor demand for private market access without the usual constraints.
However, consulting firm bfinance warned in July last year that such funds also carry risks, including potential liquidity mismatches and diluted returns.
Private credit is also on a strong growth trajectory in Australia, with global consultancy Alvarez & Marsal (A&M) reporting assets under management reached $224 billion in late 2025, up 9 per cent from the previous year. ASIC’s surveillance report meanwhile flagged issues within the asset class, including a lack of standardised valuation practices, with some firms found to have absent or incomplete frameworks.
For their research, senior researcher Byung Hyun Ahn, asset allocation research director Kaitlin Hendrix, and co-head of strategy research Namiko Saito analysed the latest financial reports (10-Ks) of the 20 largest US public companies as of 31 December 2024. The 20 companies account for 40.6 per cent of total US market capitalisation.
Through examining investments where ownership is under 50 per cent, the team found that many of these companies hold stakes in several well-known private firms.
For example, after investing US$5.3 billion in the December quarter of 2024, Amazon became a minority stakeholder in Anthropic, the privately-owned American AI start-up behind the Claude large language model. It is not alone, with Alphabet, Microsoft and NVIDIA also holding minority stakes in the company.
Exxon Mobil was also found to report a list of equity investments in private securities, showing the company’s ownership stakes ranging from 7 to 50 per cent.
Meanwhile, Dimensional noted that in addition to direct investment in private companies, public firms often have private market exposure via their corporate venture capital investments, where established companies deploy their own capital into external start-ups.
It pointed to Alphabet’s Google Ventures (now called GV) as an example. Launched in 2009 as an independent venture capital firm, GV now manages more than US$10 billion in assets under management.
As the team explained, holding Alphabet essentially gives investors an indirect stake in GV – and by extension in private companies such as Stripe, one of GV’s portfolio holdings and the world’s largest privately-owned fintech company.
“By holding the top 20 US publicly traded equities, investors also have a stake in NVentures (NVIDIA’s private capital arm), M12 (formerly Microsoft Ventures, a private equity firm and subsidiary of Microsoft), Amazon Catalytic Capital (Amazon’s VC fund), and Lilly Ventures (the global biotech investment arm of Eli Lilly), among many others,” the firm added.
Even beyond direct and corporate venture capital investments, Dimensional noted there are countless other ways that public companies can and do invest in private firms.
Using Alphabet again as an example, it highlighted how the company frequently invests in private firms through its subsidiaries.
In 2024, Alphabet invested US$350 million in the privately held Indian e-commerce group Flipkart through its wholly owned subsidiary, Shoreline International Holdings, which operates as a holding company and does not own or run any Google products or services.
Dimensional concluded that for investors looking to access the growing private markets without taking on direct risks, public companies effectively provide a gateway.
“These investments are an important reminder that even a portfolio made up entirely of publicly listed stocks provides some exposure to private assets.”
