Wave 1: How the Investment Industry Became a Buyer's Market

This newsletter is part of The Assetizer, GenTwo's thought leadership platform.

This article is part of a series examining the ideas in Assetization: Inside the Trillion-Dollar Investing Revolution (Wiley, 2026). 

In the previous piece in this series summarizing the key ideas of our new book I looked at what we call the "buy side" – investors, advisors, and wealth managers – and why their growing dissatisfaction with the status quo is one of the primary forces reshaping the investment industry.

In this piece I turn to the first response to that pressure: what we describe in the book as the "democratization of access," or Wave 1 of assetization. Here is what that chapter argues.

Stuck in a seller's world

For most of the history of modern investing, institutions decided what products existed and investors chose from the menu. That's what a seller's market means in this context — not price gouging, but control. From the Dutch East India Company's public shares in the 1600s, through investment trusts, mutual funds, and online brokerages, each wave expanded access. But the fundamental structure held: a handful of large manufacturers decided what was available, and everyone else picked from the list. Building investment products required specialist expertise, regulatory compliance, and economies of scale that only large institutions could absorb. The menu was always someone else's.

Around the turn of the millennium, that began to change. We argue in the book that finance has been having its streaming moment — and that the ETF is our exhibit number one.

The streaming moment

Think about what Spotify did to the music industry. Before streaming, record labels controlled what reached listeners — which artists got signed, which albums got made, which genres got shelf space. Consumers could choose from the catalog. They had no say in the catalog itself. Streaming didn't just cut prices. It transferred control. Suddenly listeners could curate their own experience from an almost unlimited universe of options. The labels didn't disappear, but their grip on what people could hear was broken.

The conventional explanation for the ETF's dominance is cost — lower fees than actively managed funds, comparable or better performance. We think that explanation misses what actually happened. ETFs won because they shifted decision-making power from product manufacturers to investors. With thousands of sector, thematic, factor, and geographic building blocks available, investors stopped selecting fund managers and started constructing portfolios. The individual funds may be passive. The investor isn't.

The numbers are striking. As of late 2025, the global ETF industry encompasses over 15,000 products and $18.8 trillion in assets under management. In the first nine months of 2025 alone, investors withdrew nearly $500 billion from US mutual funds and put over $1 trillion into ETFs. The firms losing assets aren't losing because they're active. They're losing because they still behave as if they get to decide what investors should own.

There's a paradox worth noting here. The industry looks more concentrated than ever — BlackRock and Vanguard dominating flows — yet simultaneously more individualised, as millions of investors make their own allocation decisions using those giants' tools. The winners in the buyer's market are the ones who understood that their job was to provide building blocks, not hand down verdicts.

This, we argue, is what Wave 1 of assetization looks like in its early form. And lately it has been accelerating.

Three ways Wave 1 is picking up speed

The first is the convergence of public and private markets. BlackRock, JPMorgan, KKR and other heavyweights are investing billions to bring private equity, private credit, infrastructure, and real assets within reach of ordinary investors. What once required multimillion-dollar minimums and the right connections is being repackaged into retail-friendly structures. The motivation is straightforward: there is enormous unmet demand from investors who want exposure to assets that public markets don't offer, and the industry has finally decided to chase it.

The second is a new generation of digital platforms that bypass traditional gatekeepers entirely. For direct investors, platforms like Moonfare offer institutional-quality private equity with lower minimums and simple digital onboarding. For advisors, platforms like iCapital and CAIS function as B2B marketplaces — streamlining access to private market investments, handling legal and operational complexity, and freeing advisors to focus on clients rather than paperwork. Further along the frontier, tokenization platforms like Securitize are using blockchain infrastructure to offer 24/7 trading, near-instant settlement, and smart contract automation. The friction is coming down fast.

The third is DIY finance tools that put portfolio construction directly in investors' hands. Zero-commission trading, fractional shares, and robo-advisors have collectively lowered the barrier to building and managing a diversified portfolio to almost nothing. The investor as active constructor — rather than passive fund selector — is now a realistic option for a much wider population.

Good news, with a caveat

Wave 1 is real and substantial. The buyer's market has arrived. Choice has expanded dramatically, costs have fallen, and assets that were once the exclusive preserve of large institutions are becoming broadly accessible.

But we also make the case in the book that Wave 1 has a ceiling, and it matters.

Investors can now access more. They still depend on institutions to create what they access. The menu is bigger and cheaper. Someone else is still writing it. Private market platforms have proliferated — but the products on offer are still designed by large asset managers. Tokenization is opening new possibilities — but the underlying assets still need to be packaged by someone with the infrastructure to do it.

The buyer's market, for all its progress, remains a market where sellers ultimately decide what exists. And as we showed in the previous piece, public markets — where most of this choice still lives — represent a shrinking slice of the real economy. The majority of the world's wealth sits in assets that most portfolios still cannot reach.

That gap is what Wave 2 is about. More on that next time.

Tom Lyons, GenTwo