Lately, I’ve been hearing the same question more often.

Clients and prospective clients have a lot of questions about private equity, private credit, and other private investments. Sometimes they ask directly. Sometimes indirectly. Usually the question boils down to some variation of: If I don’t own private investments, am I missing something important?

For most people I talk with, the concern isn’t about chasing higher returns – it’s about making sure they haven’t overlooked something that could matter for their family or their long-term security.

It’s a fair question. Private markets get a lot of attention. They’re often described as offering access to opportunities that public market investors don’t have. And it’s easy to come away with the impression that a portfolio built entirely from public stocks and bonds is incomplete.

But that framing misses something important.

This isn’t an argument for or against private investments. It’s an argument against the assumption that public-only portfolios are somehow blind to private markets. In reality, many investors already have meaningful exposure to private businesses – it just doesn’t show up under that label.

What “private markets” actually means

When people talk about private markets, they’re usually referring to companies that are privately owned rather than publicly traded. That’s an ownership distinction, not a description of what those businesses do.

Private companies still operate in the same economy as public ones. They hire employees. They sell products and services. They borrow money. They compete with public companies. They partner with them. And very often, those public companies either invest in them, or acquire them.

Public and private companies aren’t two separate worlds. They’re different ownership structures inside the same system.

That distinction matters, because it changes how we think about exposure. There’s an important difference between owning private investments directly and having economic exposure to private businesses through the companies you already own – and those two ideas are often conflated.

How public investing connects you to private businesses

One reason private market exposure is easy to underestimate is that it’s indirect.

Public companies don’t just represent their own operations. They are deeply connected to private businesses in several ways:

• Many public companies own private subsidiaries, or invest in private companies.
• Public companies regularly acquire private firms, often capturing years of private-company growth in the process.
• Public companies depend on private suppliers, partners, and service providers.
• A large share of private companies ultimately exit through acquisition rather than an IPO, folding their economic value into public companies over time.

In other words, when you own a diversified set of public stocks, you’re not just investing in a narrow slice of the economy that happens to trade on an exchange. You’re participating in a much broader network of businesses, including many that are privately held.

Research from Dimensional Fund Advisors helps put structure around this idea. Their work shows that a meaningful share of private-company value ultimately shows up in public markets over time – through acquisitions, ownership stakes, and the tight economic links between public and private firms. Not all of it. Not perfectly. But enough to challenge the idea that public investors are completely missing private markets.

That exposure is real, even if it doesn’t come wrapped in a private equity fund.

Why this gets overlooked

If this exposure exists, why does it feel invisible?

Part of it is marketing. Private investments are often sold as “access” – access to something exclusive, different, or unavailable elsewhere. Public markets, by contrast, feel familiar. Familiar things are easy to underestimate.

Another part is how portfolios are discussed. We tend to focus on labels – public, private, alternatives – rather than on the underlying economic exposure those investments represent. When we do that, it’s easy to assume that what isn’t explicitly labeled “private” must not include private businesses at all.

But exposure doesn’t depend on labels. It depends on how capital actually flows through the economy.

What private investments really change

None of this means private investments are good or bad. It does mean they behave differently – especially when life changes or flexibility matters.

Investing in private funds usually involves structural trade-offs that investors should understand clearly:

• Capital is tied up for long periods of time.
• Pricing is less frequent and less transparent.
• Fees tend to be higher.
• Tax reporting can be more complex.

Those differences aren’t flaws. They’re features of the structure. For some investors, in some situations, they may make sense.

The important point is that private investments don’t magically introduce exposure to an entirely separate economic engine. Much of that engine is already running through public companies.

A broader way to think about diversification

At Parkwoods, our investment philosophy starts with a simple idea: diversification is about economic exposure, not novelty.

The question isn’t “What categories do I own?”
It’s “What risks and opportunities am I actually exposed to, and why?”

Complexity can be useful when it clearly solves a specific problem. It’s less helpful when it’s added to check off a box. Before adding new investments, it’s worth being clear about what role they’re meant to play in your portfolio – and whether that role is already being filled.

In some cases, investors are more diversified than they realize.

A few clarifying questions

Does this mean private investments don’t add anything?
No. Private investments can behave differently and may play a role for some investors. The point here isn’t to argue for or against them, but to clarify that public investors often already have meaningful exposure to private businesses through the companies they own.

Is owning public stocks really the same as owning private companies?
No. Owning public stocks isn’t the same as directly owning private investments. But it does provide economic exposure to many private businesses through acquisitions, ownership stakes, and business relationships. Those two ideas are often confused.

Why does this matter for long-term planning?
Because it helps investors avoid adding complexity just to check a box. Understanding what you already own makes it easier to decide whether changes serve a clear purpose or simply respond to outside pressure.

A closing thought

Private markets aren’t hidden behind a locked door that only certain investors can open. Much of their value shows up in places that feel ordinary, precisely because they’ve become familiar.

Sometimes what feels missing isn’t missing at all. It’s just hiding in plain sight.

For many families, good stewardship isn’t about adding more complexity – it’s about understanding what they already own and making sure each decision serves a clear purpose.

Want help thinking this through?
If you’d like to talk through how your own investments fit together – or whether changes you’re considering actually serve a clear purpose – we offer a free, no-pressure, 20-minute Clarity Call. It’s simply a chance to get oriented and decide what, if anything, should come next.