Private markets have traditionally been inaccessible to individual investors but that is changing

The Big Picture: The private market and alternative investing world is rapidly changing.  What exist today will be different in a few years.

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The Three Ways: Private markets can be accessed in threes ways
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Financial Advisors are beginning to gain access to private market asset management platforms (iCapital, CAIS).  These platforms provide access to private market asset managers across the various alternative asset classes.  

The Benefit: Advisor are facing more and more pressure to move beyond the traditional 60/40 portfolio.  The demand by clients is forcing advisors to become more familiar with alternatives and build new diversification strategies between public and private markets.

The Challenge: Advisors continue to struggle climbing the alternative asset and private market learning curve.  A lot of advisors are leveraging public markets to access alternative assets and not venturing into private markets.  Many institutional asset managers still maintain a high minimum investment threshold to invest even with financial advisors

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Online Platforms (Fundrise, Angellist) continue to evolve and provide alternative asset investing to retail investors.  

The Benefit: An easy way to gain access to alternative assets.  There are over 100 platforms available to retail investors.

The Challenge: It is a one size fits all and high volume approach to private markets.  The platforms are focused on getting as many investors in and generating as much asset management revenue as possible.  Often, these platforms are backed by Venture Capitalist and face pressure to grow.  Some of these platforms have already shut their “virtual doors” over the years and many are strictly digital and leverage lower level analyst to engage with investors.

Asset Managers come in all shapes and sizes.  The larger assets managers (KKR, Blackstone) primarily focus on institutional investors, medium sized (Agfunder)  focus on a specific asset class and generally are for qualified purchases (individuals with $5m+ net worth) and emerging managers (bluefox private) provide personalized services across various asset classes.  

The Benefit: Asset managers are generally more knowledgeable about the asset classes they invest in, have a strong network to identify the best investments and build long standing relationships with their clients over many years.  
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The Challenge: It is difficult gain access to the large to medium sized asset managers.  It is hard to keep up with all of the various emerging asset managers, their asset class speciality and how they operate

The bottom line: as with public markets, private markets can be accessed in a variety of ways.  the whole industry is evolving so you have to choose which channel works best for you now and in the future.

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