Key Takeaways:
- As volumes and complexity grow, spreadsheets, emails and fragmented documents are creating operational risk and friction, pushing the industry toward shared, standardized infrastructure.
- For private markets to broaden access, they need to become more predictable and seamless.
- Private assets have real structural differences, so the goal isn’t to copy public-market workflows.
If you spend enough time in financial markets, it's like watching reruns of your favorite TV show — different characters and settings, but the story is always the same.
Volumes grow, complexity compounds and at some point, the infrastructure underneath starts to strain.
In public markets, that breaking point came in the 1960s, when Wall Street was literally drowning in paper. The response was the creation of a shared market infrastructure that quietly transformed how investing works for everyone.
In a recent episode of Modern Capital: The Private Markets Podcast, Talia Klein, DTCC Managing Director and Head of Wealth & Investment Solutions, brings that history into sharp focus and argues that private markets are at a comparable stage of evolution, with a clear north star: to deliver predictable, reliable outcomes for the end investor.
Listen to the podcast on Apple Podcasts
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Here’s are the top five takeaways from the discussion.
Crises have always been the catalyst for modern infrastructure
The discussion kicked off with a story that has become almost folklore in public markets: the paperwork crisis of the 1960s. The New York Stock Exchange had to close on Wednesday afternoons just to catch up on physical certificates. Back offices were buried in paper. Trades were getting lost. Settlement was unreliable. It was unsustainable.
As Klein explained, that moment forced the industry to say, “there has got to be a better way.” The solution was not for every firm to build a slightly better back office. It was for the industry to come together and create shared infrastructure, the foundation that would ultimately become the clearing and depository ecosystem we now know as DTCC.
Private markets, she suggested, are now replaying that story in digital form. Instead of lost paper certificates, the risk shows up as fragmented sub docs, capital calls managed in spreadsheets, and manual wiring instructions scattered across inboxes.
“Public markets became seamless because the industry hit a breaking point and had no choice but to build shared infrastructure.”- Talia Klein
End investors are the north star, even when you are deep in the plumbing
Throughout the episode, Klein focused on a very simple truth: somewhere at the end of all this complexity is a person just trying to invest their money.
She talked about growing up as “a child of the 2008 financial crisis,” watching her family go through real stress due to her father’s job in real estate. That experience shaped a careerlong obsession with fixing systems at the source rather than just reacting to the fallout. It is why she gravitated toward technology, largescale system migrations at J.P. Morgan, and later work on collateral, digital assets and infrastructure.
Klein explained that investing in a mutual fund is now a button-click experience. You tap, the money moves, you get confirmation. Under the hood, platforms like Fund/SERV handle more than 85% of the mutual fund activity in the U.S., so the end investor never has to think about it.
During the discussion, Klein asserted that private markets need that same mindset. She noted that the infrastructure decisions are not just operating model choices; they will decide whether millions of new investors can actually access these products in a way that feels as straightforward as their 401(k).
“In public markets, the infrastructure is invisible by design. In private markets, the investor still feels every friction point.” - Talia Klein
Scale in public markets comes with systemic responsibility
Modern markets depend on infrastructure that works reliably every single day. As Klein put it, Wealth & Investment Solutions is designed to be a modern infrastructure partner, built for operational reliability, strong connectivity, long-term scale, and growth.
Those standard matters because the gap between public and private markets is still stark. Public equities are moving to T+1 settlement, while private shares can take as long as T+90. That delay isn’t just inefficient; it keeps capital tied up, extends risk and makes it harder for banks and institutions to scale. If private markets are going to become a mainstream part of everyday portfolios, they need infrastructure that delivers the same level of reliability and systemic responsibility long expected in public markets.
“When you operate at the scale DTCC does, reliability isn’t a feature, it’s the floor. That same discipline is what private markets need as they move into the mainstream.” - Talia Klein
Private markets are fundamentally different, and the infrastructure has to respect that
Private shares are not just public equities with a different label. They often involve a three-sided relationship where the issuer remains deeply involved in transferability and governance. Legal documentation, liquidity expectations, and risk profiles all look and feel different. Some of the “frictions” are there for a reason.
Klein acknowledged that private funds are genuinely complex. Terms, fee structures, and liquidity provisions are not arbitrary. They are how managers tailor vehicles to strategy and investor needs. It is reasonable that people have worried that standardization might flatten that nuance.
Klein echoed that the goal is not to force every private asset to behave like a listed security. It is to respect what is inherently different while taking the unnecessary drag out of everything else. That requires a willingness to design infrastructure that is modular enough to handle real-world complexity.
“Copy-pasting public market workflows onto private assets ignores the whole point of being private.” - Talia Klein
Standards are the unlock, but only where the value is clear
The question is not whether we should standardize; it is what we should standardize. Private markets are losing 20 to 30 percent of operational spend to rework, miscommunication and manual processes. Everyone has “standardized internally,” which in practice means dozens of competing standards that guarantee the market stays fragmented. The result is a system that costs five to ten times more to operate than public markets and locks millions of investors out of an entire asset class.
The path forward is not to make every feature of a private fund uniform. It is to identify the parts of the lifecycle that simply do not create alpha and tackle those first. Capital calls follow a predictable pattern. Onboarding requires similar information regardless of strategy. Reporting draws from overlapping data sets. Security identifiers, settlement instructions, subscription and distribution flows are all pain points no manager should be reinventing.
The standard for standardization, Klein said, is very pragmatic. Focus on the areas where the value is unmistakable, where reducing friction and cost is good for everyone and does not compromise the things that make private markets worth investing in.
“Not everything needs to be standardized, but the things that do are the ones no manager should be rebuilding alone.” – Talia Klein