In the latest episode of the Alternative Allocations podcast, I had the opportunity to sit down with Matt Hodan, Partner with Lexington Partners, to discuss the outlook for venture capital (VC) and growth equity. After several challenging years, I wanted to explore the opportunities in VC and growth broadly, and where Matt is seeing opportunities to deploy capital today.
I began by asking Matt about the current market environment. Matt stated: “Today, we're seeing just an incredible opportunity driven by a number of forces that are shaping the venture and growth market. The market has changed a lot over the years. One of the principal forces has been companies are staying private longer.”
We have covered the implications of private companies staying private longer, and how this is reshaping the capital markets.1 We used SpaceX as an example of the changing journey that private companies take—SpaceX was a 24-year-old company when it went public earlier in the year. Due to the abundance of capital, founder Elon Musk was able to raise capital and execute a long-term strategy.
I asked Matt about two other high-profile initial public offerings (IPOs) on the horizon, OpenAI and Anthropic. Matt commented: “Those companies get most of the press. And I think there's broad awareness of the incredible journey that those companies have had and the value creation those companies have experienced. They're really the example of what's possible in the market, but they've already arrived.”
Matt noted that “We're really focused on building exposure into the tier one venture-backed assets of today but also building exposure into tier one venture-backed assets of tomorrow. We're spending most of our energy focused on identifying the next Anthropic, OpenAI, and SpaceX.”
To close out our discussion, I really wanted to understand the size and the scale of the opportunity set. “What we are seeing in venture and growth is an incredibly sizable asset class, with an incredibly fragmented universe of companies, at various stages of their development in various sectors or sub-sectors within venture growth. There are phenomenal companies being built in many different areas across the landscape.”
Matt was optimistic about the opportunities across venture and growth. After a few sluggish years, the SpaceX IPO reminded us about the incredible innovations private companies are achieving.
To learn more about the opportunities discussed in the podcast, or read any of our research, please visit the Private Markets Knowledge Hub.
To listen to this episode, or any previous episodes, please visit Alternative Allocations Podcast. We encourage you to subscribe so you never miss an episode.
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Endnotes
- Tony Davidow. “Alternative Allocations: The convergence of public and private equity.” June 16, 2026.
WHAT ARE THE RISKS?
All investments involve risks, including possible loss of principal. The value of investments can go down as well as up, and investors may not get back the full amount invested.
Investment strategies involving Private Markets (such as Private Credit, Private Equity and Real Estate) are complex and speculative, entail significant risk and should not be considered a complete investment program. Such investments viewed as illiquid and may require a long-term commitment with no certainty of return. Depending on the product invested in, such investments and strategies may provide for only limited liquidity and are suitable only for persons who can afford to lose the entire amount of their investment. Private investments present certain challenges and involve incremental risks as opposed to investments in public companies, such as dealing with the lack of available information about these companies as well as their general lack of liquidity. There also can be no assurance that companies will list their securities on a securities exchange, as such, the lack of an established, liquid secondary market for some investments may have an adverse effect on the market value of those investments and on an investor's ability to dispose of them at a favorable time or price.
“Secondaries” is the term related to private offerings (typically structured as partnerships, led by investment managers as the General Parter, or GP) where a new investor, or secondary buyer, purchases an existing investor’s commitment to a private equity fund and effectively becomes a replacement investor as a limited partner (LP).
Venture Capital and Growth Equity portfolio companies may underperform, suffer business or financial deterioration, require additional capital, or be adversely affected by market, legal or regulatory changes. These risks may be greater in smaller funds or turnaround situations, particularly where the investor lacks control over management decisions.
Any references to specific companies mentioned are only to illustrate well-known names in their respective sectors; such references should not be construed as an endorsement or recommendation of any company, product, or service.
Diversification does not guarantee a profit or protect against a loss. Past performance does not guarantee future results.
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