Morgan Stanley launches research product for private firms

Morgan Stanley has launched a dedicated research product covering private companies, joining its rivals such as JPMorgan and Citi as investor interest in unlisted startups grows.

The bank on Tuesday opened a page for private-company content in its research portal that “will spotlight the innovators and trends that are reshaping traditional business paradigms,” according to an internal memo seen by Bloomberg News.

The new page will feature reports that discuss private companies’ effects on public-market competitors and research into single names, according to a Morgan Stanley spokesperson. It will also include a series that focuses on venture-capital activities and multimedia content.

“Now more than ever, it’s critical and a strategic imperative to focus on private-company coverage,” Katy Huberty, Morgan Stanley global director of research, said in an interview. “Our private strategy, along with expanding thematic leadership, are our top priorities for the research department next year, and we are hiring on the back of both of those priorities.”

The initiative comes as the amount of research on private companies is increasing. Huberty said the bank has published more than 100 reports on these firms since 2017; more than 65 have been written this year.

In addition to the new product, two of Morgan Stanley’s analysts who previously followed public companies are now focusing on private firms. Stephen Byrd, a utilities sector analyst in the past, now works as a thematic strategist covering companies that provide power to data centers.

Adam Jonas, who wrote about Tesla for more than a decade, is now covering companies that embed artificial intelligence into robots and machines. Earlier this month, he published updates on the autonomous vessel maker Saronic Technologies and robotics startup 1X Technologies.

“We are building central teams that understand the development of private markets from specific sector and thematic levels,” Huberty said. These central resources will also help existing public-company analysts expand their focus into private firms, she said.

JPMorgan, Citi

Morgan Stanley isn’t alone in having analysts cover private firms. JPMorgan has released reports on five private companies since July, including the ChatGPT maker OpenAI and fintech firm Stripe. Citigroup hired the Balyasny Asset Management alum Heath Terry to lead coverage of the heavily private AI sector.

Closely held companies fell through the cracks of Wall Street analysts in the past due to a lack of financial information. But many of those are now too big to ignore. OpenAI’s roughly $500 billion valuation would put it among the top 20 largest companies in the S&P 500.

Nearly 1,600 startups across the world have a valuation of $1 billion or more, according to data compiled by PitchBook. These firms had an aggregate value of about $6.5 trillion by Nov. 5, a 22% increase from the end of last year.

Beyond written research, banks are also beefing up their corporate access offerings by adding more private firms to investor conferences. Morgan Stanley’s Spark Private Company Conference this year included leaders from 85 tech firms, a 35% increase from 2024 levels. Its annual technology, media and telecom conference saw 58 private firms attending this year, up from 39 in 2021.

In October, Morgan Stanley agreed to buy EquityZen, a deal that will help clients of its wealth business invest in private companies more easily.