Alternative Investments for the Retail Investor

Registered investment advisors and their advised clients are growing increasingly assertive, pushing back on general partners accustomed to calling the shots. Fees, terms, and portfolio holdings are the primary battlegrounds, but areas related to the client experience matter as well. The need for ongoing dialogue and ad-hoc demands for information from clients is driving demand for analytics and better reporting, for which data extraction, normalization, and lineage requirements are key.

Recently, the Securities and Exchange Commission added fuel to the fire by heightening reporting and disclosure requirements on GPs, as well as by imposing restrictions on so-called side deals providing special treatment to certain investors. This push for transparency and the ongoing dilution of accreditation requirements in the form of crowdfunding promise to further level the playing field. GPs and limited partners must work together as part of a long-term bargaining process to remove operational friction and transform the challenges around alts into a win-win for investors and issuers. For LPs, the opportunity relates to greater access and stature relative to the GP, and thus a greater ability to extract concessions involving fees and terms. GPs have an opportunity to increase their relevance to the end investor, innovate around products, and ultimately lower their cost base.

Key questions discussed in this report:

• What investor segments are expanding their exposure to alternative investments?
• Which financial institutions stand to gain from increasing investor access to alternatives?
• What are the challenges these institutions face in expanding the distribution of alternatives?
• Which technology solutions are playing a critical role in enabling investor access?

Companies Mentioned:

+Subscribe, 3X5 Partners, Accelex, Addepar, American Century Investments, Apollo, Arch, Blackstone, CAIS, Campbell Global, Canoe, Canopy, Central Park Group, Colmore, Crystal Capital Partners, Entrilia, EQT, Eton Solutions, Franklin Templeton, Gridline, Hamilton Lane, iCapital, iownit, Jacobi , JP Morgan Asset Management, KeyBank, KKR, KnowLedger, Lexington Partners, Macquarie Investments, Masttro, MetLife Investment Management, Mirador, Moonfare, Oak Hill Advisors, Onramp Invest, Opto Investments, Passthrough, PCR, Preqin, Proteus Capital, RAVEN & Company, RIMES, Securitize, SS&C Black Diamond, StartEngine, T.RowePrice, Venn by Two Sigma, Yieldstreet