Advisers have been warned they should consider investing their clients in private companies because of the shrinking size of the public markets.
Richard Hickman, director of the £1.4bn Harbourvest Global Private Equity trust, said companies were increasingly remaining in private hands, meaning investors should consider their exposure to unlisted companies.
He said: "It is very hard to find growth companies on the public market. Most of them are now private so it is essential to have some exposure to private companies.
"I think the reason companies are staying unlisted is a mixture of regulatory pressure and the costs of IPOing and remaining listed having increased.
"Being a public company can consume a lot of management time because you can be dealing with activist investors which can distract managers."
According to Bloomberg, share buybacks by UK companies are at their highest level since 2008 - up 9.7 per cent over the past 12 months.
The flow of new IPOs has also slowed, with the UK stock market shrinking by 3 per cent since 2018.
The use of private companies in funds has hit the spotlight recently after Neil Woodford suspended his Equity Income fund because of the high volume of redemptions and the sizeable proportion of the fund allocated to illiquid, unlisted companies.
But Mr Hickman said this had not reduced interest in funds such as his.
He said: "Where Woodford went wrong is structuring his fund as open-ended but what we have actually seen is advisers and investors have taken a look at it and been more discerning than we gave them credit for, and realised it is about a specific fund manager."
Over the past three years the Harbourvest Global Private Equity trust has returned 70 per cent while its sector, the AIC Private Equity, has returned 29 per cent.