Episode summary
Morningstar's CEO Kunal Kapoor - live from the Morningstar Investment Conference
Alt Goes Mainstream
· · Hosts: Michael Sidgmore · Guests: Kunal Kapoor
Summary
Kunal Kapoor argued that the convergence of public and private markets is accelerating, but adoption is being slowed by a lack of common language, inconsistent vehicle structures, regulatory frictions, and especially opaque fees. He said Morningstar’s role is to stay on the investor’s side, even when that means taking positions that “piss off the industry,” because investors need comparable information more than product marketing. He emphasized that private markets are becoming more accessible, but that transparency and standard documentation are still uneven, particularly for retail and wealth-channel investors.
Kapoor said the biggest near-term challenge is not just liquidity, but comparability: investors need simple total cost data, clearer return calculations, and better benchmarks across public and private assets. He was cautiously bullish on evergreen and interval-style vehicles, especially for long-horizon investors in 401(k)s, but said fees remain a major hurdle and that some semi-liquid products charge about three times a typical mutual fund. He also argued that the best use of private markets may be as part of a broader portfolio, not as a substitute for public markets.
He framed Morningstar’s strategy as building the data, ratings, and IP needed to make private markets analyzable like public markets. That includes Morningstar PitchBook workflows, unicorn indexes, and a possible “style box” for private markets. Kapoor’s bottom line was that private markets can matter more in an economy where public companies are shrinking, but investors should still focus on cost, time horizon, and whether the public markets already meet their needs.
Key takeaways
- Kapoor said private-public convergence is real, but it is being held back by fragmented structures, poor disclosure, and a lack of common language.
- He said the biggest obstacle for semi-liquid private market products is fees, noting some launched vehicles cost about three times a typical mutual fund.
- Kapoor thinks the interval fund structure is currently the most effective of today’s private-market vehicles, though he wants more liquidity and better fee transparency.
- He said Morningstar’s goal is to create private-market comparability tools similar to public-market style boxes, star ratings, and fair values.
- Kapoor believes private markets may be best used for long-horizon investors, especially inside 401(k)-style allocations, where compounding matters more than immediate liquidity.
Notable quotes
“the convergence of public and private is accelerating. And the question is how far it goes and how quickly it moves”
“We're here for the investor. We hear about empowering the investor. And that often means we take positions that piss off the industry”
“There's too much variance in the way fees are charged. And part of what we just showed in the study is that the typical fee in some of these semi-liquid vehicles”
“We need to create similar IP for the private markets. And so that's going to be my focus and our focus as a firm”
“I believe there's a lot of opportunity and that while historically private markets were maybe viewed skeptically by some corners of the universe, they are changing enough that they're becoming part of the entire investment haststack”
How the episode opens
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Venture capitalists to athletes to creators to the person who has collected trading cards. We're going to collision of culture and finance. We're going and all welcome to the Algo's mainstream podcast.
Thanks for having me here or actually welcome to our conference I should say. Yes. No, this is live from morning stars investment conference.
It's been a fascinating few days. I want to get to your background and evolution that Morning Star has gone through as a firm because I think it's so pertinent to so much of this convergence between public and private.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- private markets convergence
- liquidity vs illiquidity
- evergreen funds structures
- fee and cost transparency
- investor education and data accessibility
Companies and tickers mentioned
- MORN
- Morningstar
Watch the episode
Watch “Morningstar's CEO Kunal Kapoor - live from the Morningstar Investment Conference” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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Alt Goes Mainstream, this episode and its artwork belong to Michael Sidgmore. Octagon is not affiliated with the show; this page is an independent summary.
