Macquarie Investment Management has joined forces with Wilshire Associates to offer private market solutions to mass affluent investors.
These investors can now avail “institutional-quality” private market offerings such as private equity, private debt, alternative yield, and private real assets.
Wilshire Associates COO Jason Schwarz said: “Together we are providing access to the same private markets-focused investment team and resources previously only available to Wilshire’s large institutional clients.”
Several factors make it difficult for sophisticated investors to access private markets.
Large minimums, fees, retirement plan ineligibility, cumbersome tax reporting, cash drag, and gates are some of these impediments.
Through the partnership, the two companies intend to overcome these hurdles by offering solutions that support diversification into private markets.
Macquarie Investment Management has a presence in the US, Europe, Asia, and Australia. At the end of September 2020, it oversaw assets of more than $242.4bn.
Wilshire Associates has ten offices and caters to more than 500 institutional and intermediary clients. The firm advised on over $1trn in assets at the end of June 2020.
Macquarie Investment Management global head Shawn Lytle said: “Mass affluent investors maintain modest allocations to alternative investments even though the benefits of diversification are well known.
“Together we are striving to provide private market access for a fast-growing class of retail investors.”
The asset manager believes that investments in private markets is “well positioned over the long term”.
Private markets are said to provide lower valuations and more opportunities compared to public markets. This coupled with low interest rates enable private market investing at a low cost of capital.
Public markets have dropped by around half in the past 20 years. In contrast, private equity net asset values increased over seven-fold in the same period.
Last month, Swiss investment bank UBS entered into a long-term alliance with Partners Group to tap the latter’s private markets investment capabilities.