SEC approves plans to expand access to private markets — CNBC

The U.S. Securities and Exchange Commission (SEC) has approved proposals to expand individual investors’ access to private markets. The initiatives provide for increasing the number and types of accredited investor licenses available to individuals, CNBC reports.

Access to private assets

SEC Chair Paul Atkins said that investor demand for opportunities to invest in private markets is growing. According to him, one of the commission’s priorities is to facilitate individual investors’ participation in such markets while protecting them from fraud and bad actors.

The proposals may also allow registered investment advisers to charge performance fees of up to 20%. This level of fees has traditionally been used in the hedge fund and alternative investment sectors. This could encourage more private asset managers to work with retail investors.

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Last August, U.S. President Donald Trump signed an executive order to democratize 401(k) investors’ access to alternative assets. The document allows Americans to allocate a larger share of their retirement savings to private equity and other alternative assets.

Withdrawal restrictions

The expansion of access comes amid increased attention to the liquidity problems of private assets. Earlier this year, redemption requests increased in certain semi-liquid private credit instruments: investors, including retail investors, sought to withdraw funds over concerns about risky debt held by companies in the software sector.

In February, Blue Owl Capital suspended regular quarterly cash redemptions in the Blue Owl Capital Corporation II fund, which is aimed at U.S. retail investors, after withdrawal requests increased. Blackstone and Apollo also introduced similar redemption restrictions.