PErspectives | Private Wealth for Private Equity Markets

Welcome to Issue No. 11 of PErspectives—our periodic publication featuring news, trends and legal developments in the private equity (PE) industry. PE managers, recognizing the potential private wealth presents for PE’s next round of growth, are investing in building out teams and designing frameworks that will enable retail investors to access PE exposure, but also manage the liquidity and timeline hurdles inherent in traditional PE fund structures.

In this piece, we examine the market forces behind the push to “democratize” PE and the focus of PE managers on raising more capital from individual investors and retirement plans. We also take a look at the historic challenges—both regulatory and operational—that have restricted PE managers from raising capital from retail investors, the structures developed to access this capital and how technology and evolving regulation could help PE managers open up their platforms to a wider retail investor base.

With a view to how these developments are impacting PE stakeholders, we explore these and other critical questions:

• Why are both PE managers and retail investors alike pushing for access to PE assets, and what is the magnitude of this opportunity?
• What regulatory constraints limit the scope of PE managers to raise money from retail investors, and why are they in place?
• How are PE managers able to reach individual investors and retirement capital in the U.S. and Europe?
• How are PE managers navigating the regulatory and operational challenges around gaining access to retail capital?
• What are some available routes to market for PE managers to both address investor liquidity requirements and reduce potential risks?

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