US-based alternative investment platform YieldStreet has launched a new private equity strategy that will give retail investors access to direct equity investments in alternative asset managers.
According to YieldStreet, alternative asset management firms, including private equity firms, are likely to be profitable businesses owing to the recurring annual revenues coming from management and incentive fees.
The company notes that investing in the asset managers themselves, also called GP Stakes investing, may help investors benefit from strong cash flows.
Investments in mid-size managers is said to becoming increasingly popular among other GP Stakes strategies.
This is because mid-size managers are considered a larger opportunity set when compared to the number of targets relative to the larger manager segment.
Yieldstreet founder and president Michael Weisz said: “Over the past few years, the amount of capital raised for GP Stakes investing was the highest on record, exceeding $23bn.
“Equity ownership in alternative asset management companies has created tremendous wealth opportunities as demand for alternative assets continues to grow.”
Yieldstreet’s new private equity strategy comes at a time when investing in private equity and private credit managers continues to grow.
Last month, YieldStreet has secured a strategic $50m follow-on investment to expand its distribution capabilities internationally.
The fundraising round was led by London-based Mayfair Equity Partners.
It followed Yieldstreet’s $100m Series C funding round announced earlier this year. The company said at the time that it would use the proceeds from the round to develop new products, strengthen user base and expand new international markets.
Established in 2015, Yieldstreet offers retail investors access to alternative investment opportunities.