The conventional narrative today about the coming mega-IPO wave is that it will provide liquidity for early investors and employees at companies like SpaceX, OpenAI, and Anthropic while giving the public a chance to participate in these companies’ successes.
Gavin Baker, speaking on the All-In Podcast, offered a more counterintuitive view: the biggest structural beneficiary may be the next generation of private companies. His argument is that these landmark IPO listings will free up “hundreds of billions of dollars of new late-stage demand” from mutual funds that are currently excluded from the private market because of their already large allocations to SpaceX, OpenAI, and Anthropic.
Why the World’s Biggest Funds Are Sidelined From Private Companies
Long-only mutual funds sit on some of the largest capital pools on the planet. Baker argues they “dwarf sovereign wealth funds.” Yet under SEC rules, these vehicles can allocate only up to 15% of assets to private companies, and most of the largest firms self-impose stricter ceilings in the 3-7% range. The names Baker cited include Fidelity, Baillie Gifford, Capital Research, Wellington, and T. Rowe Price.
Of that group, only T. Rowe Price Group (NASDAQ:TROW | TROW Price Prediction) is publicly traded, with a market cap of $22.61 billion and approximately $1.71 trillion in client assets as of Q1 2026. That scale illustrates the magnitude of capital held by mutual fund companies.
Baker pointed to a striking recent example: “Baillie Gifford was forced to sell SpaceX last year for regulatory reasons.” This shows that one of the world’s most coveted private holdings was sold by a long-term holder because the allocation rules required it.
How Upcoming IPOs Unlock the Dry Powder
The unlock works through reclassification. A fund holds a private company inside its capped private bucket. The company files to go public. SpaceX, for instance, filed its S-1 with the SEC on May 20, 2026. Once the company trades and the lockup expires, that holding leaves the restricted private bucket and counts as a public position.
Once this becomes a public position, the capacity to hold private companies opens back up. The fund can deploy fresh capital into new late-stage private companies. When this is played out across every big institutional holder of SpaceX, OpenAI, Anthropic, Stripe, Databricks, and similar names, there will be, as Baker describes, “Hundreds of billions of dollars of new late-stage demand that is coming back to the market.”
Why the IPO Wave Could Benefit Founders
David Sacks summed up the consequence on the same episode: “Founders are going to be in the catbird seat.” More institutional capital chasing a finite set of late-stage private deals translates into higher valuations, friendlier terms, and greater leverage for the companies raising capital. The IPO wave begets the next funding wave, a structural tailwind for the private ecosystem.
That dynamic arrives at a time when active managers are looking for differentiation. T. Rowe Price CEO Rob Sharps noted on the Q1 2026 call that “With the recent volatility and broadening of markets, our active management approach positions us to take advantage of the opportunities this climate brings.” The firm’s alternatives book reached $58.5 billion in AUM with $21.6 billion in unfunded capital commitments as of Q3 2025, capacity that could chase exactly the kind of late-stage names Baker is describing.
The Democratization Angle
Jason Calacanis layered on a second thread: potential SEC changes to accreditation rules and greater liquidity mechanisms (secondary markets) could reshape who is allowed to invest in venture funds and how easily they can exit. Crossover vehicles already exist, such as the ERShares Private-Public Crossover ETF, which combines public stocks with up to 15% allocation to illiquid private companies via special-purpose vehicles. Looser accreditation thresholds and deeper secondary markets could gradually widen the door for ordinary investors, though this remains proposed rather than settled.
The Takeaway
The mega-IPO wave is usually framed as a liquidity event for the listing companies. Baker’s framing extends the lens. Each IPO frees mutual-fund capacity that flows directly into the next generation of private companies, with founders sitting on the receiving end. Combined with potential accreditation reform and improving secondary-market liquidity, the private market could be entering a self-reinforcing cycle worth watching. Most of that opportunity still sits inside institutional channels that everyday investors cannot directly tap, so the democratization piece remains rule-dependent and speculative for now.
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