Schwab CEO on $660M Forge deal: Private markets will create new opportunities for retail investors

Core Insights - Charles Schwab announced the acquisition of Forge Global, a private markets platform, for $600 million, valuing Forge at $45 per share, leading to a nearly 70% increase in Forge's stock price [1][4] - This acquisition follows Morgan Stanley's recent purchase of Equity Zen, indicating a trend in the private markets trading space [1] - The deal aims to enhance access for retail clients to private market investments, aligning with Schwab's mission to democratize investment opportunities [3][10] Company Strategy - The acquisition is seen as a strategic move to provide retail clients with access to a growing marketplace of private companies, which have been increasingly successful in wealth creation [3][10] - Forge is recognized as a leader in the private company marketplace, with relationships with over 625 companies and the highest transactional volume in the sector [5][6] - Schwab plans to introduce a fund structure that allows investors to access a basket of private companies, with a 40-act fund expected to launch in Q1 2026 [6][10] Market Trends - The private market has seen significant growth, with companies now staying private for an average of 14 years before going public, compared to 6 years in 2000 [9][10] - The decrease in IPOs by 85% reflects this trend, as private companies have grown in size and wealth creation opportunities [10] - The acquisition is expected to create liquidity and demand in the private markets, benefiting both investors and employees of successful private companies [12][11] Client Engagement - Schwab is also focusing on expanding its offerings in the cryptocurrency space, with plans to launch spot crypto trading in the first half of next year [13][15] - Client engagement in crypto has increased, with Schwab clients owning 20% of exchange-traded products related to cryptocurrencies [14]