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September 28, 2021

US may open private-markets funds to retail investors

By Verdict Staff

An advisory group for the US Securities and Exchange Commission (SEC) has reportedly voted in favour of letting ordinary investors to invest in private funds.

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The SEC’s Asset Management Advisory Committee approved a report that recommended the regulator to enlarge the common investor’s access to private-equity, private-debt and real-estate vehicles, WSJ reported.

At present, only institutional and wealthy investors are eligible to invest in private equity funds.

The report, submitted by a subcommittee on private investments, suggested that ordinary investors could gain from the performance of such funds.

It also recommended that the regulator should balance greater access with investor protections.

In the recent past, government regulatory bodies have urged to let more retail investors, who don’t qualify as accredited investors, into private equity.

The Asset Management Committee in its report noted that ‘most retail investors are precluded from investing in the majority of private investments’.

“We believe that the SEC should consider how to amend the regulatory framework to provide wider access to private investments by retail investors whilst maintaining appropriate safeguards,” it said.

While the committee’s vote would not change the existing norms, it is expected to accelerate the ongoing push for wider access by some regulators, politicians as well as asset managers.

SEC ex-chairman Jay Clayton made efforts to open private-markets funds to more investors. He argued that the existing rules deny most people access to some of the best investments.

However, it is unclear whether the SEC would immediately focus on expanding access to private equity funds under current chairman Gary Gensler.

Free Report
img

How attractive are current investment opportunities in Europe?

Europe has been identified as one of the most favorable regions for investors, seeing high investment activity in the past year. Most of these investments have been through Debt Offering, valued at close to $700 billion. The region has provided attractive investments in a diverse set of companies. Companies who tend to major themes such Digital Media, Cloud, Artificial Intelligence, E-commerce, and Big Data are recording the highest number of deals, with Digital Media recording close to 2,000 deals. However, GlobalData’s whitepaper offers a full view of the market, analyzing less successful or attractive points of investment as well, examining statistics on Equity Offering investments and PE/VC deals. Understand how government agencies for economies around the world use GlobalData Explorer to:  
  • Track the M&A and Capital Raising volumes into their target market
  • Identify the top sectors in the target market attracting the investments
  • For any investment segment, identify the top Investors inside and outside the target economy that are already investing in the Segment
  • Assess and showcase the growth potential for various Industries in the target economy
Don’t miss out on key market insights that can help optimize your next investment – read the report now.
by GlobalData
Enter your details here to receive your free Report.

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