Time to shrink the “disclosure gap” between private and public equity markets

This chapter argues for reducing the persistent “disclosure gap” between private and public equity markets. While private equity has grown to resemble public equity in many structural respects, it continues to operate with significantly less regulatory and public transparency. The authors challenge the prevailing view that private contracting between sophisticated investors and fund managers eliminates the need for public disclosure. Drawing on legal theory, agency cost concerns, and empirical observations, they propose a modest set of mandatory public disclosures – such as fund-level returns and portfolio company performance metrics. These reforms aim to enhance accountability and mitigate risks posed by agency conflicts, opacity, and regulatory arbitrage. The chapter also engages with objections to public disclosure and argues that a rethinking of “publicness” in private markets is overdue.