The SEC approved plans Wednesday to widen individual investor access to private markets, expanding accredited investor licenses and letting advisers charge higher performance fees. The move comes as retail-focused private credit funds have faced a wave of redemption requests this year, exposing how hard these assets are to exit.
The Securities and Exchange Commission has approved sweeping plans to widen access to private markets for individual investors, just as the industry's push into retail wealth faces sharper scrutiny. SEC chairman Paul Atkins said investor demand for private market opportunities is growing, arguing that exposure to what he called "one of the great engines of American enterprise" should not be reserved for the wealthiest investors.
More licenses, higher fees
The proposals, approved Wednesday, would expand the number and type of accredited investor licenses available to individuals. They would also let registered investment advisers charge performance fees of up to 20% on retail products, a level historically used in hedge funds and alternatives, to draw more private asset managers into the retail space.
Those changes follow the Trump administration's broader push to ease guardrails on private markets. Last August, President Trump signed an executive order titled "Democratizing Access to Alternative Assets for 401(k) Investors," which allows Americans to put more retirement savings into private equity and other alternatives.
Redemption pressure tests liquidity
But the expansion comes as the private assets industry's rush into retail has drawn closer scrutiny, because the harder-to-sell, higher-yielding assets on offer do not fit neatly with retail investors' expectations of easy access to their money. Some semi-liquid private credit business development vehicles saw a surge in redemption requests earlier this year, as investors — including retail clients — scrambled to withdraw money amid concerns over risky software debt.
In February, Blue Owl Capital paused regular quarterly cash redemptions in its U.S. retail-focused Blue Owl Capital Corporation II fund, after a rise in investor withdrawal requests. Other private credit managers, including Blackstone and Apollo, followed with similar withdrawal caps of their own.
Source: CNBC
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