16 June 2019

Private Equity Aims to Include Smaller Investors

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One of Wall Street’s most exclusive investment products is inching toward the mainstream.

Private equity funds — vast pools of capital that buy and sell entire companies — may become more accessible to smaller investors under a plan being contemplated by the company that runs the Nasdaq stock exchange, a person briefed on the matter said on Friday. The plan, still in its preliminary stages, envisions a market where investors in private equity funds can sell their stakes to individuals whose net worth falls far below the usual threshold for such investments.

It is uncertain whether the new market will pass muster with regulators. Any effort to sell stakes in private equity funds to smaller investors raises a number of thorny legal questions, private equity lawyers said. The Nasdaq OMX Group is aware that the Securities and Exchange Commission may not approve the plan, and the relevant paperwork has not yet been filed, the person briefed on the matter said.

Whatever the outcome, the plan points to a desire among some of the giants of private equity — like Kohlberg Kravis Roberts, the Blackstone Group and the Carlyle Group — to allow smaller investors into their funds.

Click here for the full article from the New York Times.

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