Financial Advisors Gain Access to Private Equity Using Alternative Investment Platforms

Financial Advisors Gain Access to Private Equity Using Alternative Investment Platforms

Alternative investment platforms are giving financial advisors access to private equity investments. Typically, this requires large sums of money and a three to five-year lock-up period.

Private placements are not advertised or purchased on the open market. They often consist of accredited and institutional investors. Alternative investment platforms make it easier for advisors to offer private equity investments. These platforms negotiate which private equity funds get added to the platform. They are able to offer access to a menu of private funds and negotiate lower investment minimums. This is all done while integrating custodial reporting and electronic subscription processing. Furthermore, these platforms conduct due diligence on the investment. They link to custodians, allowing advisors to include private investments in client portfolios.

Private equity investments may be an unfamiliar marketplace for advisors. So, investment platforms are likely to help advisors better navigate the investment. These platforms introduce independent research on the funds offered. This leads to more private equity fund offerings.

Since the 1970s the size of the private equity market has steadily grown. It is becoming a more popular investment every year. In 2014, the Cambridge Associates U.S. Private Equity Index returned 11.25%, net of all expenses and fees. That’s in comparison to the 13.69% gain in the S&P 500 Index.

Investments in a self directed IRA add retirement income on a tax-deferred basis. If using a Roth IRA, income is tax-free. Alternative investments offer clients diversity in investment portfolios. Portfolio diversification is essential to the growing success of retirement planning. To learn more or to start investing in private equity, call Midland at 239-333-1032. Or, visit the Midland Trust website.

Sources:, 2015, Investopedia, LLC., Private-equity investing made easy for financial advisors, 6/18/2015