Public markets are shrinking while private markets are attracting huge amounts of capital. But it is still not clear which is the better bet The publicly listed equity markets, in theory at least, are dependent on private small-cap companies. Such firms represent the cutting edge of capitalism as they eventually list in public markets to form the seed corn for larger firms to emerge. But over the past decade or two there has been a dramatic shift towards private markets that raises questions about the rationale for public markets. Private and public equity markets have long been seen as two distinct asset classes with different types of investment managers acting in them. Yet whether a company is listed or not might not necessarily have any bearing on its risk and reward characteristics.