Robinhood'sboss thinks there's something fundamentally broken about how global capitalmarkets work. Vlad Tenev, the CEO who built his fortune democratizing stocktrading, now says it's a "tragedy" that regular investors can'taccess private markets where the real money gets made.Robinhood Boss Says WallStreet's Biggest Secret Is UnfairSpeaking onBloombergWealth, Tenev didn't mince words about what he sees as Wall Street'sbiggest inequity. "A big tragedy is that private markets are where thebulk of the interesting appreciation and exposure is nowadays," Robinhood's Tenev toldhost David Rubenstein. "It's a shame that it's so difficult to getexposure in the US."Thecomments highlight a growing frustration among retail trading platforms asprivate companies stay private longer and capture more value before goingpublic. Companies like SpaceX, OpenAI, and other tech darlings have generatedmassive returns for institutional investors while everyday Americans watch fromthe sidelines.Robinhood CEO Vlad Tenev said retail investors are largely excluded from the “huge opportunity” available in private markets. https://t.co/BWOA8mL60A— Bloomberg (@business) July 28, 2025What’simportant here, private market investments dramatically outperform publicmarkets over the long term, generating returns that can be 400-500 basis pointshigher annually. The wealth creation difference is staggering - while publicmarket investors earned 6.6x their money over 25 years, private marketinvestors generated 19.9x returns according to Cambridge Associates' comprehensivedata.The Numbers Don't LiePrivateequity has delivered an average annual return of 13.1% over 25 years,significantly outpacing the S&P 500's 8.6% return during the same period.Even morecompelling data comes from MSCI Private Capital Solutions, which shows thatsince 2000, private equity has generated a 13% net annualized return comparedto the Russell 3000's 8% return. This represents outperformance of 486 basispoints annually.Theilliquidity premium alone adds 2-4% annually to private equity returns over thelong run. This premium compensates investors for giving up the ability to selltheir investments quickly, but the trade-off has proven highly rewarding forthose who can afford to wait.Privateequity has outperformed public markets in 97 out of the last 100 quarters whenlooking at 10-year rolling returns. Even during the three quarters ofunderperformance, private equity regained its lead in the immediately followingquarter.Robinhood's EuropeanExperimentTenev isn'tjust complaining about the problem. His company has already started testingsolutions, though not without controversy. Last month, Robinhood rolled outtokenized products to European customers that supposedly give them exposure toprivate companies like OpenAI without actually owning equity in those firms.The moveraised eyebrows among regulators and industry watchers who questioned how theseproducts are valued and whether retail investors truly understand what they'rebuying. Critics worry about transparency and whether these complex instrumentscould blow up in customers' faces.Robinhood CEO downplays OpenAI concerns on tokenized stock structure https://t.co/6tWzgrtBXa— CNBC Tech (@CNBCtech) July 8, 2025But Tenevseems undeterred. "We're obviously working to solve that," he said,suggesting more products could be coming to bridge the gap between retailinvestors and private markets.Robinhoodis not the only company currently offering such solutions. Several majorcryptocurrency exchanges have joined this trend as well, partnering with firmslike xStocks, which specializes in asset tokenization.Why Private Markets May BeToo Risky for Regular InvestorsThefundamental mismatch between how private markets operate and what everydayinvestors need could create dangerous situations for both individuals and thebroader financial system.The UK'sFinancial Conduct Authority delivereda stark warning about this trend. Deputy Chief Executive Sarah Pritchardemphasized that while some people might benefit from private market exposure"with the right information and support," the reality is that"for others, it will not" be appropriate. The regulator's positionacknowledges a harsh truth - these investments simply aren't designed for mostpeople.The coreproblem lies in what experts call liquidity mismatch. Unlike stocks that youcan sell instantly, private market investments lock up your money for yearswithout any guarantee you can get it back when you need it. Moody's researchhighlighted this critical flaw: "Retail investors often require quickeraccess to their capital and have less long-term investment flexibility"compared to the pension funds and endowments that traditionally dominate thesemarkets.Even moretroubling is what might happen if retail money floods into private markets tooquickly. Moody's research suggests this could trigger a dangerous race amongfund managers to deploy capital, potentially leading them to "compromiseon underwriting standards or stretch into riskier assets to keep pace withinflows.”Wall Street Takes NoticeThe privatemarkets boom has caught everyone's attention, not just regulators and fintechupstarts like Robinhood. Earlier this month, banking giants JPMorgan Chase andCitigroup announced they're expanding research coverage to include privatecompanies in hot sectors like artificial intelligence and aerospace.The numbersexplain why. Private company valuations have been surging for years, creatingpaper fortunes for those lucky enough to get in early. Meanwhile, thetraditional initial public offering market has struggled, with many companieschoosing to raise money privately rather than face the scrutiny of publicmarkets.This trendhas created what Tenev calls the "greatest remaining iniquity" inAmerican finance. While pension funds, endowments, and wealthy individuals canwrite checks to private equity firms and venture capital funds, regularinvestors are largely shut out by regulations designed to protect them fromrisky investments.The Access ProblemThe ironyisn't lost on anyone. Robinhood made its name by eliminating tradingcommissions and making it easier for millennials to buy stocks and options. Butwhen it comes to the investments that have generated the biggest returns overthe past decade, even Robinhood's millions of users are stuck on the outsidelooking in.Currentregulations require investors to be "accredited" to participate inmost private investments, meaning they need either $1 million in net worth or$200,000 in annual income. Those rules were written decades ago to protectunsophisticated investors from losing their shirts on risky deals.But criticsargue these outdated thresholds now serve mainly to protect the wealthy'saccess to the best investment opportunities. While a middle-class investor canday-trade meme stocks on Robinhood, they can't buy shares in the next big techstartup."That'swhere I would point to as the greatest remaining iniquity and opportunity inour capital markets," Tenev said, making clear he sees this as more thanjust a business opportunity for his company.Thequestion now is whether regulators will go along with efforts to democratizeprivate markets, or whether they'll stick with rules designed for a differentera of finance.This article was written by Damian Chmiel at www.financemagnates.com.