Online brokerage Titan now offers its retail investor users access to private funds offered by alternative investment managers Global Apollo Management APO and Carlyle Group Inc. CG.
What happened? In an interview with Yahoo Finance earlier this month, the co-founder and co-CEO of Titan Joe Percoco said Titan’s new partners will provide its users with access to the private credit and real estate markets, areas typically reserved only for institutional investors.
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Asset managers such as Apollo and Carlyle are reportedly pushing to give retail investors better access to private markets.
Titan’s new real estate fund offering will come from Apollo and will include a 1.5% fee on top of Titan’s 1% annual fee on deposits of $10,000 or more. Users with deposits under $10,000 pay a fixed fee of $5 per month.
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Carlyle’s private credit offer includes a 1% fee with additional incentive fees added once a certain hurdle is met.
Investors must qualify as Accredited Investors to invest in private equity firms that have not yet gone public via an IPO or other means.
To qualify as accredited, an investor must meet one of the following two conditions:
1. Individual income of $200,000 or more (or joint income with a spouse of $300,000 or more) in each of the past two years and a reasonable means of maintaining that level of income in the future.
2. Net worth over $1 million, excluding the value of a principal residence.
Titan plans to expand its partnerships to other investment managers and offer investors access to new asset classes and funds along the way.
Benzinga’s opinion: Access to private market offerings can help retail investors further diversify their portfolios, but private equity markets are also relatively illiquid and high risk compared to public markets.
Retail investors should proceed with caution and ensure that they fully understand any private investments they may be purchasing.
Photo: Dilok Klaisataporn via Shutterstock