Why Schwab is Forge-ing Ahead
They say imitation is the sincerest form of flattery.
Just eight days after Morgan Stanley revealed its acquisition of EquityZen, Charles Schwab announced it will purchase Forge Global for $660 million, representing a 72% premium to Forge’s last trading price. The deal marks the first acquisition under new Schwab CEO Rick Wurster and signals the company’s growing interest in private market investing.
Both EquityZen and Forge operate in a rapidly expanding segment of the financial industry: secondary markets for private company shares. These platforms connect investors, employees, and private companies seeking liquidity before an eventual IPO or corporate transaction. By facilitating trading in names like SpaceX, Stripe, and OpenAI, they make the private markets more accessible to individual investors and wealth management clients.
"A great way for our clients to participate in the growth of private markets"
The rationale for Schwab's deal is very straightforward. Wealthy investors increasingly expect access to more than just stocks and bonds, and Schwab is looking for more wealthy investors as clients. The company will incorporate Forge's private company trading directly into its platform, immediately rolling out the offering to "select ultra-high-net-worth investors", before expanding it to $1+ million clients in the near term.
Forge has also been developing a registered investment fund under the Investment Company Act of 1940, often referred to as a “40 Act Fund.” The goal is to democratize access to private shares through a diversified vehicle. Schwab intends to continue advancing these plans into next year, leveraging Forge’s extensive data set and trading history to help support pricing and portfolio management.
That same data could become increasingly valuable as private assets move closer to being included within retirement plans, a shift that will require more frequent and reliable valuation of underlying holdings.
The acquisition also strengthens Schwab’s Workplace Financial Services business. By enabling liquidity options for employees of private companies, Schwab can now offer a more holistic solution that extends from workplace stock plans to secondary market trading. Notably, this mirrors one of the key motivations behind Morgan Stanley’s acquisition of EquityZen, as both firms look to enhance their ability to serve corporate clients and high-net-worth investors alike.
