Will private equity investing go mainstream? Based on actions by NASDAQ’s OMX Group and large PE firms, the answer is getting closer to “probably” than ever before. Though they have not officially filed anything with the SEC, OMX has approached the regulator about making PE available to smaller investors. The firm has already made other illiquid assets available, selling stakes in private companies to individual investors who might not otherwise qualify.
Large PE firms like KKR and Carlyle have made noise about tapping the market of individual investors — which means 401(k)s. One firm, Partners Group, has approached regulators about how these investments might work in 401(k) plans. Central Park Group buys stakes from investors in PE firms and resells them to smaller investors. But some experts say that smaller investors may not do as well with PE as large, more savvy groups like big pension plans do.
Regardless, there’s a demand by some for greater returns, and alternative assets may be the siren call that many cannot resist. At the same time, there’s a desire by PE firms to tap new sources of funding. That’s a powerful combination.
