The convergence of public and private markets was a key topic of debate at the Morningstar Investment Conference UK 2025, in London, where 700 attendees assembled for a full day of investment sessions.
Morningstar’s chief executive officer, Kunal Kapoor, opened the conference, saying that he expects this trend to accelerate in the UK in the next year or so.
Kapoor stated that there is a need for a common unified language that stretches across public and private markets: “It’s really hard for you today to go in front of clients and explain why, in a publicly facing vehicle we get instant liquidity, and why in a privately facing vehicle we might not. And those two may come together in a portfolio. But we want to create that language for you.”
He also said that adopting AI will become increasingly important to both investors and advisors in the process of personalizing products.
This theme was picked up in the “CIO Debate” on Reshaping Asset Management. Legal and General’s Sonja Laud, M&G’s Fabiana Fedeli, and Morningstar’s Dan Kemp agreed that the growth of private capital will have a seismic impact on investing.
The Biggest Change for Investors in a Generation?
In a panel session moderated by Monika Calay, head of research at Morningstar, Kemp said that the convergence of public and private markets could potentially be the biggest change for the investment industry in a generation. “It will color the rest of our careers and how we look at instruments and portfolios.” Notably, as private markets become more widely held in portfolios, managers not used to increased transparency, and able to charge “eyewatering fees”, will reveal whether they are the good and the bad actors. The movement will reveal “who can be trusted with your clients’ money,“ he added.
Sonja Laud noted that client interest in private products is strong, but liquidity is not where it should be, and the market has not yet been stress tested. A crisis will show that “not all private assets are equal,” M&G’s Fedeli said, and private asset players perform in different ways.
Fedeli added that over the past few years, public markets have outperformed private markets as well. But this has been a function of the higher interest rate environment and may not be repeated.
UK Stocks Still Undervalued
In terms of public stocks, Morningstar’s Kapoor said that the UK is still screening as undervalued.
This was also a focus for Adrien Gosden, manager of Jupiter UK Multicap Income fund. He said the UK is in an opportune position due to its trade surplus with the US. Moreover, “fundamentally the UK knows where it is going” and it will not face the same level of uncertainty as other markets. In this case, UK equity income “is a good tool for investing over the next six months,” he said.
Morningstar’s Kemp, in a session called “Investing for the Next Decade”, then argued for investing for the long term and set the scene for how advisors can help investors “stay on the roller coaster” and ignore short term noise.
“It’s a marathon, not a sprint,” he said, showing that over 10-year periods, from 1975 to today, markets always grow, despite crises and market crashes. Three key points matter: championing investors, conducting fundamental research to identify quality securities, and the price you pay for the security. He described these as useful “principles” for an uncertain environment, which are more flexible than hard-and-fast rules.
Alastair Campbell on ‘Soft Power’
The keynote speaker, Alastair Campbell, famous for his roles as Tony Blair’s press secretary and director of communications during the Labour government of 1997-2007, shared his views on the state of global democracy, the need to “fix the Brexit mess”, and the importance of soft power.
With China already the biggest economy in the world, in a shifting volatile geopolitical environment, new superpowers are emerging. In the future, Campbell believes India could become a superpower to rival China, but so could Europe.
He polled the audience on the success of both the UK and US governments, ending his session with the following words: “Thank God for Canada, and thank God for Australia.”
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar's editorial policies.
