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(Bloomberg) -- Morgan Stanley and Citigroup Inc. wealth executives are seeing private markets increasingly shape their businesses, marking a major shift from liquid assets that historically drove financial markets.

Morgan Stanley has boosted offerings for rich clients investing in closely held businesses in recent years, largely as companies prolong their paths to initial public offerings, according to Elizabeth Dennis, Morgan Stanley’s head of private wealth management. Citigroup’s rich clients typically now have more than a quarter of their portfolios allocated to private markets, according to Ida Liu, global head of the New York-based firm’s private bank.

“The economy is private,” Dennis said in a panel discussion alongside Liu at Bloomberg’s Women, Money & Power event in London on Tuesday. It’s where “value creation is largely occurring.”

The two banks are part of a global wave of firms focusing on a private markets boom that supporters predict could be on the scale of the passive-investing movement. Within the next decade, private-market assets under management are expected to reach as much as $65 trillion, more than tripling in size since the end of 2012, according to recent research from Bain & Co.

Meantime, the deep pools of capital typically available to the world’s super-rich are making them increasingly influential players in private markets amid higher borrowing costs in the post-pandemic economy.

EquityZen, a marketplace for buying shares in private companies, said allocations from investment firms for super-rich families more than doubled during 2023, compared with the average for the three prior years. A recent UBS Group AG survey of 230 of those firms, which each manage almost $1 billion in assets on average, found they planned to over-allocate this year to the so-called secondaries market, where backers of closely held companies sell stakes to others – often at a discount.

“The path of travel is clear,” Joan Solotar, Blackstone Inc.’s global head of private wealth solutions, said on the panel Tuesday. “There’s going to be greater and greater allocation to privates.”

Fannie Wurtz, Amundi’s head of distribution and wealth, also said on the same panel that the firm is increasing private market investments.