The Securities and Exchange Commission (SEC) has approved plans to expand access to private markets for individual investors, responding to increasing demand for these investment opportunities. SEC Chairman Paul Atkins emphasized that participation in what he termed 'one of the great engines of American enterprise' should not be limited to the wealthiest or most sophisticated investors.
The proposals aim to broaden the criteria for qualifying as accredited investors and include allowing registered investment advisers (RIAs) to charge performance fees of up to 20%, similar to those in the hedge fund sector.
This move aligns with the Trump administration's efforts to ease regulations around private markets, highlighted by an executive order aimed at allowing greater investment in private equity through retirement plans.
However, this initiative comes at a time when the private asset sector is facing scrutiny due to challenges with liquidity and redemption requests from retail investors, particularly in the private credit space. Notably, firms like Blue Owl Capital and Blackstone have experienced increased withdrawal requests, raising concerns about the suitability of these investments for retail clients.
Jon Gray, COO of Blackstone, noted that gating measures in private credit vehicles are a standard feature, indicating the complexities involved in these investments