Retail Revolution? The Democratization Of Private Equity

As available capital dries up for many institutional investors, some private fund sponsors have started to look elsewhere for the commitments required to continue driving their fundraises during the first prolonged down market for private markets since the 2008 financial crisis¹. This search for new and alternative sources of capital has dovetailed with increased interest in investing in alternative asset classes from "retail" investors (i.e., individual investors that qualify as "accredited investors" under applicable securities laws).

At the same time, a rise in the use of open-ended structures for private funds and increased sophistication in the private fund secondaries market have created new avenues for liquidity outside of the traditional 10-year plus extensions term for closed-ended private funds.