How goes GPs’ push for more retail capital? Private equity’s quest to access retail dollars gets a little easier this morning after blue-chip investors vindicate alternative investment platform CAIS with a $1 billion valuation. The business connects and educates independent wealth managers seeking access to private equity and credit, real estate, hedge funds, structured notes, and the like. Apollo Global Management (NYSE: APO), Motive Partners, and Franklin Templeton (NYSE:BEN) are leading the $225 million funding round, announced today.
The transaction is a big deal for a private equity industry that increasingly sees access to retail investors as a fertile source of new fees. Typically reliant on capital from institutions, market leaders like Blackstone have become more aggressive in courting high net worth individuals as a source of growth. The timing of the new market inroads has been fortuitous. Money managers across the spectrum seek access to private equity and credit strategies’ double digit returns just as platforms like CAIS make navigating alternative investments more feasible.
The obstacles for a typical financial advisor are numerous. Higher minimum investment thresholds, fees and need for education are all barriers to entry, CAIS says. Reducing investment friction has helped the platform net customers managing over $2 trillion in assets.
Instead of delving into logistical details, CAIS’ platform helps free advisors’ time so that they can focus on actual investment selection. Time well spent, the PE funds newly in the catalog of these advisors’ investments books must surely agree.