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| Cars being sold for cash after the 1929 crash. (Ullstein Bild/ via Getty Images) |
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Nizar Tarhuni is Executive Vice President of Research and Market Intelligence at PitchBook, where he leads the firm’s global Institutional Research and News organizations.
A mission to democratize private markets has flooded the industry with new investment vehicles, allowing retail investors to access structures once reserved for institutions. But history has shown that these innovations can sometimes benefit asset managers more than individuals.
In the late 1920s, a new class of financial product swept through American markets: the investment trust. These pooled vehicles promised ordinary investors access to professionally managed, diversified portfolios of securities—exposure previously reserved for the wealthy. Banks and brokerages marketed them aggressively under the banner of financial inclusion. The products were wildly popular. By September 1929, more than $600 million in investment trust securities were being issued in a single month.
The pitch was democratization. The mechanics were something else entirely.
Trusts layered leverage upon leverage—issuing preferred stock and debt to amplify returns. Goldman Sachs’ Trading Corporation spawned Shenandoah Corporation, which spawned Blue Ridge Corporation—a fund within a fund within a fund, each layer adding leverage that magnified gains on the way up and devastation on the way down.
Retail investors bought in at premiums to the underlying net asset values, paying more than the securities inside were actually worth, because they trusted the brand on the door. And they did it largely on margin—putting down as little as 10 cents on the dollar, with banks lending the rest. As banks began feverishly extending margin credit to everyday investors, over $8.5 billion in margin loans were outstanding by the fall of 1929—more than the entire currency supply in circulation.
When prices turned, the structure became the accelerant. Margin calls forced retail investors to liquidate. Forced selling drove prices lower. Lower prices triggered more margin calls. The least sophisticated participants—the ones “inclusion” was supposed to serve—became the transmission mechanism for systemic collapse. The lesson wasn’t that ordinary people shouldn’t participate in markets. It was that the mechanisms of inclusion matter as much as the access itself.
I keep thinking about that dynamic as I watch the current push to bring retail capital into private markets through semi-liquid evergreen structures.
The structural echoes are hard to ignore. |
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| Continuation vehicles: Tax considerations to drive private equity fund value |
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Continuation vehicles are playing a growing role in private equity exits, but they can introduce tax outcomes that are often misunderstood. This insight explores why continuation vehicle transactions are frequently tax‑deferred rather than tax‑free—and how rollover structures, income allocations, and crystallized gains can affect future tax exposure. Designed for fund CFOs navigating liquidity decisions, the article highlights key considerations that can help avoid timing mismatches between tax obligations and cash distributions.
View full article. |
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PitchBook's 2025 VC Emerging Opportunities report highlights projected annualized returns on investments across various emerging technology sectors. Which two sectors are predicted to lead in 2026 and outperform the average annualized rate of return on investment?
A) SaaS and defense tech
B) Cybersecurity and defense tech
C) SaaS and medtech
D) Fintech and cybersecurity
Find your answer at the bottom of The Weekend Pitch! |
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A selection from our most-read articles of the past few days.
- Will Anthropic's new Claude tool further disrupt the legaltech sector? The AI startup's tools have sent software stocks plunging, but legaltech startups in particular aren't fazed. Read more.
- Securing LP commitments is growing costly for fund managers. Running a PE firm is more expensive than ever, and a recent survey shows the highest reported co-investment allocation of 110 cents per dollar to get LPs on board. Read more.
- Funds-of-Funds are finding a fresh face. Once thought of as "a gateway into private markets," as fundraising landscapes change, these unique vehicles are taking on a new identity. Read more.
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“The private credit scare trade—much like and in tandem with the AI scare trade—has really walloped the group this past month.”
—Greggory Warren, senior equity analyst at Morningstar, discussing the average decline of over 16% for major PE firm stocks during the month of February. Read more about why PE firms have been on a rollercoaster ride over the last month here. |
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Keep an eye out for these insights and research reports coming out this week:
- Q4 2025 Public PE Roundup
- Analyst Note: SpaceX: When Jupiter and Venus Come Together
- Q4 2025 Food & Beverage CPG Report
- February 2026 Global Markets Snapshot
- Analyst Note: The Business of AI
- 2025 Annual Global Private Market Fundraising Report
- 2025 US All In Report
- 2025 EU All In Report
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| (Thibaud Moritz/Getty Images) |
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Answer: A.
SaaS and defense tech are the two sectors expected to outperform in 2026 on annualized return on investments. In contrast, sectors once abuzz like medtech and healthtech are expected to underperform when it comes to early-stage returns. Read more about emerging VC opportunities and expectations for 2026 here. |
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This edition of The Weekend Pitch was written by Nizar Tarhuni and Nadine Manske. It was edited by Kia Kokalitcheva.
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