Platform launches aiming to democratise retail private market investment
FundBase Group is set to launch a new platform for Australian retail investors looking to enter the private markets universe.
The investment fund infrastructure provider said the platform will enable Australian retail investors to access private capital markets that have traditionally been the preserve of wholesale investors with assets of at least $2.5 million or income of at least $250,000.
With a minimum investment of $5,000, the Retail Syndicates initiative will allow retail investment in venture capital, private equity offerings and a range of private market funds, according to FundBase Group.
The company confirmed that it will launch a pilot program early this year with select venture capital, private equity and alternative asset managers looking to raise funds.
Anna Nedbaylova, co-founder of FundBase, said the platform seeks to democratise access to private markets, generate wealth creation for a broader range of investors, and provide fund managers with access to additional capital.
“Private markets are expanding at an accelerating pace, with global assets under management forecast to grow from $16.8 trillion in 2023 to over $30 trillion by 2030. In Australia, private market investments are gaining momentum with more than 30 per cent of Australian investment portfolios now allocated to private markets,” she commented.
A recent Hamilton Lane survey discovered that Australian advised clients exhibit the highest enthusiasm for private markets out of all the regions, with 61 per cent of clients described as “very interested”. The US followed at 53 per cent for eager clients, Canada at 42 per cent, and Europe at 33 per cent.
While there is a growing level of sophistication among retail investors who are keen to invest in the asset class, some 84 per cent of Australians are currently excluded due to income and asset requirements for wholesale investors, Nedbaylova added.
“Our vision is to create an inclusive space that every alternative and private market fund manager looking to raise funds can be a part of and where every retail investor looking to diversify into private markets can find a home.”
Richard Mulligan, fellow co-founder of FundBase, said the company estimates the initiative could potentially result in up to $80 billion flowing into the private markets ecosystem over the next five years.
However, Mulligan emphasised the high risks of the asset class that retail investors need to be aware of, such as extended lock-up periods.
He said: “While the aim of the Retail Syndicates is to lower barriers to entry and open access for retail investors, FundBase Group is committed to providing full disclosure about the potentially high risks associated with private market investments.
“FundBase Group will ensure that investors are well-informed to make the investment decisions and receive the appropriate retail investor protections. These investments may involve significant capital risk and could be locked up for as long as seven to 10 years.”
Brett Jollie, former chief executive of abrdn, has also joined the firm as an independent non-executive director. He will contribute to the development and growth of FundBase Group, including the rollout of Retail Syndicates.
AUTHOR
Jasmine Siljic
Recommended for you
AZ NGA has entered into a strategic partnership with national advice firm MiQ Private Wealth, as a way to provide a succession solution, as well as career development opportunities for staff.
While the advice profession struggles under growing operating costs, Adviser Ratings has found more than half of practices – some 58 per cent – that generate less than $250,000 in revenue report no profit at all.
The Federal Court has ordered the freezing of assets and the appointment of receivers to two entities linked to Australian Fiduciaries, ASIC’s latest move in an ongoing investigation into the company’s managed investment schemes.
Off the back of the August adviser exam results, the profession has seen 17 new entrants hit the Financial Adviser Register (FAR) this week, helping numbers return to positive territory.
