Investments in the unlisted securities of private companies are high-risk, illiquid investments. There is no guarantee of liquidity and you may not be able to sell your shares or realise your investment for an extended period, if at all. The value of investments can go down as well as up, and you may lose all of your invested capital. Tax benefits depend on your circumstances and tax rules may change. Any information we provide is to help with your research and isn’t financial advice. These investments are typically intended for UK Certified High Net Worth or Certified/Self-Certified Sophisticated Investors only. This is a financial promotion by Retail Book Limited (FRN 994238).
⚠ WARNING: INVESTMENT RISK
- You could lose all the money you invest in private markets
- Private market investments are highly illiquid – there is no guarantee of liquidity, and you may not be able to sell your shares or realise your investment for several years or at all
- These investments are high risk and not suitable for most investors
- You should only invest if you can afford to lose all your investment
- Private market investments should only form a small part (typically no more than 10%) of your investment portfolio
Who Can Invest in Private Markets?
Due to the additional risks of private market investments, they cannot be marketed freely to the general public. Instead, investors must be categorised as High-Net-Worth Investors, or Certified or Self-Certified Sophisticated Investors.
FCA guidance suggests these high-risk investments should typically represent no more than 10% of your investable assets. Only invest money you can afford to lose completely.
The Growing Role and Relevance of Private Markets
Private markets have grown rapidly over the past decade as high‑growth companies have stayed private for longer. Historically, access to private markets has been limited, fragmented, and often opaque, negatively impacting the accessibility of these investments.
Today, new market infrastructure and structured tools are emerging to make private market participation more structured and potentially more accessible for eligible investors, though the fundamental risks of private market investing remain.
This document introduces how private markets work, why they matter, and how structured mechanisms - such as PISCES and TPE Investment Company (TPEIC) structures - are helping open access while maintaining appropriate regulatory safeguards.
What Are Private Markets?
Private markets refer to investments in companies that are not listed on a public stock exchange. Investors buy and sell shares through negotiated, bilateral, or structured processes rather than on public markets. Private companies may seek investment to fuel growth, fund innovation, or provide liquidity to early shareholders.
Historically, such transactions were manual, bespoke, and inconsistent in disclosure, making them harder for individual investors to access.
Why Private Market Access Has Been Limited
Private markets were traditionally dominated by institutional investors for several reasons:
- Bespoke transactions: Secondary sales were negotiated privately between buyers and sellers.
- Inconsistent disclosure: Not all private companies provide the same level of financial, operational, or risk information.
- Opaque pricing: Without a public market, pricing was often negotiated and less transparent.
- Operational complexity: Managing private share transfers involves legal documentation, shareholder approvals, and underlying registry processes.
As a result, liquidity windows were infrequent, access uneven, and processes unpredictable.
A More Structured Approach: How the Market Is Changing
New mechanisms are being developed to bring structure and order to private markets. One example in the UK is the PISCES (Private Intermittent Securities and Capital Exchange System) regulatory framework.
PISCES introduces an auction‑based mechanism for private companies to allow secondary trading on a periodic basis. It is not the same as going public, but it brings order and transparency to selected liquidity events.
How PISCES Works
- Auction windows: Rather than continuous trading, companies open defined windows where investors can buy or sell shares.
- Standardised disclosures: Companies must follow a disclosure framework, supporting consistent and informed decision‑making.
- Equal treatment: All bids are governed by the same rules.
- Private status maintained: Companies remain unlisted and avoid the additional disclosure requirements and costs of public markets.
PISCES creates an option between remaining completely private and pursuing an IPO.
While PISCES brings more structure to private markets, it does not eliminate the fundamental risks of investing in unlisted companies. Auction windows are periodic, disclosure requirements are less comprehensive than for public companies, and liquidity is not guaranteed even when auction windows are available.
The Role of TPE Investment Companies (TPEICs)
To enable investor access within private market frameworks such as PISCES, TPE Investment Companies (TPEICs) are used as single‑asset vehicles that hold shares in a private company. Essentially, the TPEIC allows investors to acquire and hold an indirect investment in the underlying company.
What a TPEIC Does
- Holds shares of a single private company
- Operates under a defined governance and fee structure
- Facilitates investor participation through periodic liquidity windows
- Supports transparent and consistent investor treatment
Through the TPEIC, investors gain exposure to the underlying investment without being added directly to the private company’s cap table. This helps maintain company governance while enabling liquidity.
Why Structure Matters for Investors
As private market access becomes more organised, several principles become increasingly important:
- Clear investor communication — so participants understand the opportunity and associated risks.
- Defined eligibility rules — ensuring transactions remain within regulatory boundaries.
- Equal treatment of investors — maintaining fairness in pricing and allocations.
- Operational transparency — reducing information asymmetry and complexity.
How RetailBook Fits into the Evolving Private Market Landscape
RetailBook aims to give individual investors access to capital market opportunities on the same terms as institutions — promoting transparency, fairness, and simplicity. As private markets shift toward more formalised mechanisms such as PISCES and TPEIC structures, RetailBook’s role becomes increasingly relevant:
- Supporting structured investor access
- Working with issuers, intermediaries, and regulators to widen participation
- Operating within a transparent, regulated framework
Private markets are becoming more structured through mechanisms like PISCES and TPEICs. However, these remain high-risk, illiquid investments that are not suitable for most investors. They may play a role for some eligible investors with appropriate risk tolerance, long investment horizons, and diversified portfolios.
Key Risks
Private market investments carry risks that investors should understand:
- Limited liquidity: Private company shares are typically highly illiquid. Trading opportunities may be infrequent and limited to specific auction windows or negotiated bilateral sales. You should not expect to access your money for several years (or potentially at all).
- Limited disclosure: Private companies are not required to publish the same level of detail as public companies.
- Valuation and pricing uncertainty: There is no open market for private company shares. Prices are typically determined through negotiation or auctions, which may not appropriately reflect value.
- Potential loss of capital: You could lose all of the money that you invest.
- Information asymmetry: Private companies are not required to publish the same level of financial, operational or risk‑related information as public companies, so investors may have materially less information to assess the opportunity.
- Concentration risk: Investments in single private companies are typically high‑risk, undiversified exposures, meaning outcomes depend heavily on the performance of one business.
- Dilution risk: Future fundraising rounds may dilute existing investors, reducing their ownership percentage and potential returns.
- Transaction structure / fee risk: Investment structures (e.g., auction mechanisms, special purpose vehicles, intermediated arrangements) may introduce additional complexity, fees, or rights limitations, which can affect investor outcomes.
Due to the additional risks of private market investments, they cannot be marketed freely to the general public. Instead, investors must be categorised as High-Net-Worth Investors, or Certified or Self-Certified Sophisticated Investors.
Always read the offering documents carefully and consider speaking to an independent financial adviser if unsure. FCA guidance suggests these high-risk investments should typically represent no more than 10% of your investable assets. Only invest money you can afford to lose completely.
Next Steps
Private markets are evolving fast. Structured models such as PISCES and TPEICs create new opportunities for investors to access growth‑stage companies while preserving the private status of the underlying business.
RetailBook remains focused on enabling participation, improving clarity, and supporting a fair and transparent market environment.
If you’re considering investing in private markets, take time to understand the structure, risks, and mechanisms through which access is provided.
This information is not investment advice. You should consider seeking independent advice.
