Summary
Private markets are entering a new phase. As demand broadens beyond traditional institutional investors, fund managers are under pressure to scale access, improve transparency, and modernise how private funds are structured and operated.
Recent industry research indicates this shift is accelerating according to State Street’s 2025 Private Markets Survey, 56% of respondents believe that within the next one to two years, at least half of private‑market flows will come through semi‑liquid, retail‑style vehicles marketed to individuals.1
To serve this expanding investor base, general partners need to move beyond manual, relationship driven processes and adopt more industrialised operating models.
LSEG’s Digital Markets Infrastructure (DMI) is designed to support this evolution. By automating the private funds lifecycle and supporting the digitisation of investment structures through tokenisation, DMI aims to provide the infrastructure required to scale private markets responsibly and efficiently.
Key themes
- The broadening of access to private markets demands greater transparency, more flexible fund structures, and significantly higher levels of automation
- Tokenisation, enabled by blockchain, provides the foundation for industrial scale private market infrastructure
- DMI supports the transformation needed to engage family offices, high net worth individuals and other emerging investor segments alongside traditional institutions
We sat down with Rod Elliott, Head of Digital Asset Solutions, to discuss why tokenisation is becoming central to private markets’ next phase of growth. With private markets now estimated at around $25 trillion in size and projected to represent 30% of global assets under management by 20332 , many expect the question to shift from whether the market will broaden to how it will do so sustainably.
How is DMI addressing these challenges?
DMI operates within LSEG’s regulated framework, open‑access infrastructure for tokenised assets, starting with private funds. Built on Microsoft Azure as part of the LSEG–Microsoft strategic partnership, DMI is designed to support the full private funds lifecycle in a more standardised, automated way.
DMI connects general partners and limited partners through a single digital environment, providing the infrastructure needed to support onboarding, AML/KYC checks, fund administration, custody, reporting and more. By removing manual friction from these processes, it becomes easier for participants to identify opportunities, transact efficiently and manage investments over time.
How does DMI help limited partners manage private fund investments more actively?
DMI provides a central point where private fund opportunities can be discovered and evaluated through permissioned access to information. Streamlined digital workflows simplify execution and ongoing management.
Crucially, tokenisation can also enable features such as fractional participation, allowing investors to make smaller allocations. This can improve diversification, reduce concentration risk and make private funds more accessible to investors who are newer to the asset class, without altering the underlying risk profile of private market investments.
Does DMI support evergreen fund structures?
Yes. Evergreen funds, which may allow limited partners to enter and exit during the life of the fund, are growing in popularity, particularly among wealth investors.
DMI is well suited to supporting these structures. Investors can see available opportunities, complete due diligence and manage subscriptions digitally. When combined with private markets data available in Workspace, limited partners gain better visibility and control across the investment lifecycle.
How does DMI improve operational efficiency for general partners?
For general partners, DMI enables the shift from bespoke, manual operations to a more industrialised model. By introducing digital workflows, DMI aims to reduce reliance on manual processes across onboarding, documentation and reporting.
In turn, this helps shorten time to value for new investors and improves the consistency and quality of investor servicing. DMI is also built with interoperability in mind, allowing firms to integrate the platform with their existing technology stacks and bring new funds to market more efficiently.
How will DMI continue to evolve?
Over the next 12 months, DMI is aiming to continue to expand in terms of capabilities, asset classes and participant ecosystem. LSEG is investing significantly in this infrastructure because we believe it has the potential to play a foundational role in the evolution of private markets.
By combining regulated infrastructure with tokenisation, DMI is designed to support the next phase of private markets growth, enabling broader access while maintaining institutional grade standards.
“The question for private markets is no longer whether they will broaden, but how they can do so sustainably and at scale.”
What is driving the need for tokenisation in private markets?
Interest in private markets is expanding rapidly as investors look to diversify portfolios and access alternative sources of exposure. Family offices and high net worth individuals, in particular, are increasing their exposure to private assets, including private funds, subject to applicable investor classification and suitability requirements.
Historically, private markets were built for a relatively small group of large institutional investors. That institutional focus shaped everything from fund structures to operational processes. As the investor base widens, those legacy models are increasingly showing their limits.
Tokenisation has the potential to address this mismatch. By using blockchain technology to modernise how private assets are issued, administered and serviced, tokenisation can help create the conditions for private markets to scale. This is reflected in the growth outlook: global tokenised fund assets under management are forecast to rise from $90 billion in 2024 to $715 billion by 2030, a compound annual growth rate of 41%.3
What do general partners see as their biggest challenges today?
Private markets have traditionally operated in a highly bespoke way. Many processes across the fund lifecycle, from onboarding to reporting, remain manual and resource-intensive.
As general partners look to reach a broader and more geographically dispersed investor base, those approaches become increasingly difficult to sustain. Distribution models based on word-of-mouth do not scale, and manual onboarding, AML/KYC and custody processes introduce friction and operational risk. Ultimately, that complexity can detract from investor experience and relationship quality.
What challenges do limited partners face?
From a limited partner perspective, discovery remains a major issue - particularly for newer participants in private markets. Opportunities can be difficult to identify, information access is often restricted, and due diligence processes are still largely manual.
There is also a structural constraint. Many investors are understandably cautious about committing large amounts of capital to a single private fund investment. Without more flexible structures implemented in line with fund documentation and regulatory requirements, that risk concentration can act as a barrier to broader participation.
Useful links
Find out more
Private Funds are already live on DMI.
Limited partners and general partners can request access to learn more.
Disclaimer:
This material is provided for information purposes only and does not constitute an offer, invitation or solicitation to invest, nor does it constitute investment, legal or regulatory advice. Availability of products and services is subject to jurisdictional restrictions and regulatory requirements.
2 https://www.moneymarketing.co.uk/news/private-markets-aum-could-reach-30-of-all-global-aum-by-2033/