What do you think about private market investing (including PE) for everyone?
Hey finance enthusiasts!
I need your thoughts/feedback.
We're exploring the idea of launching Venturevest, a platform set to empower retail investors across Canada/US with access to alternative investments. Asset classes would include private equity, real estate development, private credit, and venture capital with a focus on liquidity, high returns and risk
mitigation. To give you an idea, we would be targeting an average return across funds of 13% NET IRR. We would partner with 3rd party funds to offer investors expertly curated and diversified fund options. Just like a traditional brokerage, we would offer tools, investor dashboards and a learn platform so that users can educate themselves on our offerings.
We're currently in the PoC phase, and your feedback is highly valued!
- What are your thoughts on a simple platform that provides access to alternative investment opportunities? (Think Wealth Simple but for Private Market Funds)
- Have you had any good or bad experiences with other similar platforms?
- What features would you be interested in seeing?
Our mission is to empower the everyday Canadian/American by providing them with previously limited access to alternative investments.
Again, you're honest feedback is crucial. I appreciate ALL inputs weather negative or positive. Thank you!
Based on the most helpful WSO content, the idea of democratizing access to private market investments, including private equity, real estate, and venture capital, is quite intriguing and has been gaining traction. Here are some thoughts on your queries:
Simplicity and Accessibility: A platform that simplifies the process of investing in alternative assets could be a game-changer. It would need to be user-friendly and transparent, much like Wealthsimple has done for stocks and ETFs. The key would be to maintain simplicity while dealing with the inherently complex nature of private market investments.
Experiences with Similar Platforms: While I don't have personal experiences to share, the sentiment on platforms like Fundrise and RealtyMogul has been mixed. Some users appreciate the access to real estate markets, while others are wary of the illiquidity and fee structures. It's crucial to learn from the shortcomings and successes of these platforms.
Desired Features: Investors might look for features such as:
Your mission to empower everyday investors aligns with a growing desire for inclusive finance. However, it's important to balance the promise of high returns with clear communication about the risks involved in alternative investments. Remember, while the potential for higher returns is attractive, these investments often come with longer lock-up periods and higher risk profiles than traditional public market investments.
Sources: Thoughts on KKR Global Impact/Blackstone Impact Investing/Other MF Impact Platforms?, Best Roth IRA Platforms?, Thoughts on Working for RE Crowdfunding Investment Platform, Thoughts on Financial Technology Partners, Thoughts on LaSalle Investment Management / CBRE GI?
To be candid, the market is over saturated with these kinds of platforms. Wealthsimple has started a private markets program, and a big part of the rollout is Paul III is definitely the connection between them and the Liechtenstein royal family - the dude knows everyone.
Aside from the operational issues, it’s going to be hard to get people into actually good funds with low AUM, let alone factoring in liquidity. Investors would be better off putting their money into publicly traded PE managers like Brookfield, which have been providing an over 13%+ Total Return.
Your customer base will also be immensely difficult to scale as you will need to explain many things to them that you wouldn’t with a more experienced investor.
Also reporting alternative investments tends to be much more complex, the paperwork can be a real hassle for retail investors
Yeah - there is a good reason why this does not exist / why the larger asset managers with their own in house alternative investment funds have not succeeded here
Thank you for your insightful response! I agree that there are several difficulties/problems with existing alternative investments platforms. But what are your honest thoughts on an alternative investment platform that eliminates common private market challenges:
✅ Monthly liquidity/distributions
✅ Semi-annual redemption periods
✅ Transparent low fee offerings
✅ Target 13% platform-wide IRR
✅ No capital raising period
✅ Constant investment ability
✅ Access to all Canadian investors (No accreditation status needed)
✅ 5k min investment
✅ Access to expertly managed funds
If these issues were resolved, would you consider Venturevests as an investment platform?
How? The fees must be enormous to offer some of these things
So how would your platform make money?
Great Question! Potential revenue streams we are considering include management fees, premium subscriptions, a financial advisor partnership program and fund fees revenue sharing. What are your thoughts on these strategies and do you have any other areas we should look into? Thank you!
You’re about 5-10 years late
Interesting. Would you mind elaborating on the timing? Thank you!
I think it's a cool idea, but a major problem is that SEC, FINRA, and Fund Managers don't want retail investors, only accredited/institutional, in private markets which is why the minimal reporting requirements and lack of transparency exist. I don't see why funds specifically would do this as they would only be inviting more regulation, something they desperately try to avoid. I guess you could only partner with the large publicly traded fund mangers but their return is going to be tied to fund performance/fund raising, so why wouldn't I just buy shares in them?
Also how do you deal with liquidity and allow investors to access money easily when funds are only going to invest money they have locked up for the life of the fund? Seems that that would put an incredible amount of risk on you the intermediary to fill that gap in timing. Maybe if you align it with tax deferred accounts that typically aren't accessed for a long period of time, but that would probably just invite more unwanted regulations.
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