Why private market infrastructure — not capital — is the real constraint on growth.

The assumption

Private markets were always treated as a niche problem

For years, custody of unlisted assets — private equity, private credit, infrastructure — has been treated as too complex, too bespoke and too small to justify serious technology investment. The industry accepted fragmented spreadsheets, manual reconciliation and bespoke registers as the cost of doing business.

But what if that assumption is backwards — and the market is small because the infrastructure is missing?

The scale

Private markets are no longer small

Yet compared to public markets, this ecosystem still runs on fragmented, manual plumbing.

The bottleneck

Custody frameworks were built for liquid markets

CASS 6 and 7 assume clear ownership, standardised identifiers (ISINs) and automated settlement. Unlisted assets break every one of these assumptions:

• Ownership records are maintained via bespoke registers or spreadsheets.
• Transfers often require issuer or GP consent.
• There are no universal identifiers or messaging standards.
• Valuations are periodic, not continuous.

The result: two-to-five times higher operational costs. Custody infrastructure is acting as a ceiling on market size.

The myth

Tokenisation improves interfaces, not infrastructure

Tokenisation promises fractional ownership and 24/7 transferability. But the core constraints are off-chain:

1. Legal vs. digital

The token is a mirror, not the source of truth. Legally binding records remain off-chain in fund documents, issuer registers or transfer-agent systems.

2. Transfer restrictions

Shareholder agreements and LP consent rights cannot be bypassed by token rails. Every transfer still requires validation against off-chain legal constraints.

3. Custody obligations

CASS mandates auditable linkage to underlying assets, whether tokenised or not. Firms must still safeguard client assets and reconcile ownership positions.

4. Fragmentation risk

Without standardisation, tokenisation creates new parallel record systems, interoperability challenges and additional on-chain / off-chain reconciliation layers.

The bottom line: tokenisation alone won’t fix infrastructure.

The real opportunity

Redesign the system, don’t just digitise the assets

Public markets scaled because of rails: exchanges, clearing, custody and settlement. Private markets are now large enough to justify the same evolution.

It’s not about digitising assets. It’s about redesigning the system they live in.

Learn more at saafehouse.com, or get in touch at stephen@saafehouse.com.

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