Tim Andrews, Rainer Kobler and Tom Slocock recently co-hosted a roundtable discussion on the retailisation of private equity at The Drawdown Operational Leaders’ Summit. Key themes from the well-attended and interactive session included:
- Democratising private markets assets beyond institutions is the proverbial 3-legged stool, requiring product, execution capability and distribution. Products are emerging with evergreen funds, semi-liquid and perpetual capital funds becoming more popular. On the execution front there are solutions in the market to address inefficient processes like subscription, investor onboarding, settlement and reporting. Looking ahead, the tokenisation of assets on the blockchain has potential to accelerate and scale these processes. Distribution direct to retail remains the most challenging leg of the stool with intermediated access leveraging the infrastructure and expertise of established players in the space currently the most viable option for all but the very largest managers.
- A rising tide lifts all ships – large managers and mega-funds are laying the groundwork for democratisation via innovating on the product side, building or partnering with fintechs to develop of technology enabled solutions and scalable market infrastructure and a pro-active education campaign across the wealth channel.
- Evolution, not revolution – retailisation is coming, and it will filter down to the mid-market. There will be a continued evolution in the way firms across eco-system come together to make democratisation to private wealth work for them, for instance via building in-house capability, buying or partnering with other firms to acquire infrastructure and expertise, working with service providers or intermediaries or a combination of all three.
As private markets assets occupy an increasingly significant portion of individuals’ portfolios we’ll see a shift towards a more public markets style investment experience the industry coalescing around common standards and centralised market places. Only time will tell exactly how this will unfold however what’s clear today is that retailisation is a huge opportunity that will take an industry wide effort to realise. It was therefore a pleasure to come together with iCapital and Hamilton Lane, firms that are both very much at the forefront of delivering wider access to the private market.
At IDR we’re excited to be playing our part in supporting this paradigm shift with a one and done authentication for investors across subscription KYC and tax, in one platform. To find out more, explore our solutions.
