The landscape of private market investing has transformed dramatically since 1982. Back then, with an average U.S. household income of approximately $24,000 per year, and regulations like Regulation D setting strict criteria for who could participate, private investments were limited to a very exclusive audience. At the time, only around 5,000 millionaires nationwide broadly qualified to invest in private markets.
Fast forward to today, and the picture looks entirely different. One in 15 Americans, an estimated 22 million people, now qualify to purchase private investments based on investable assets alone. This change is more than a statistic—it marks a paradigm shift in who can access and benefit from these opportunities. Yet, with increased eligibility and awareness, there are new challenges and opportunities for private fund managers.
Investor Tiers Are Expanding – and Diversifying
Today’s investor base isn’t just growing; it’s segmenting into distinct tiers that require tailored approaches and structures. A clear understanding of these segments is critical to effectively capture capital:
This breakdown underscores a fundamental shift: fund managers must now think about how to structure vehicles that attract accredited investors and provide compliant access for retail investors. Structures such as interval funds, tender offer funds and non-traded BDCs can be customized based on the target audience—whether it’s enabling performance fees for accredited investors or using 40 Act-compliant private market structures for true retail.
The Evolution of Private Market Investments
Private markets have experienced tremendous growth over the last 15 years, driven largely by the widespread adoption of the Yale Endowment model and the diversification of asset allocations. However, this growth is beginning to slow as many institutional investors and high-net-worth families reach their optimal allocation levels.
This raises an important question for fund managers and investor relations teams alike: Where will the next wave of capital come from?
The answer, increasingly, lies with retail investors. By 2027, retail investors are projected to drive up to 50% of all capital raised in private markets, according to the State Street Private Markets Survey. For fund managers, this presents both a challenge and an opportunity.
Breaking Down Barriers to Retail Participation
Despite their growing eligibility, many retail investors remain hesitant or unable to participate in private markets. The primary barriers include:
To address these issues, fund managers are turning to innovative solutions, such as retail-friendly investment structures. Interval funds, tender offer funds and non-traded BDCs/REITs are examples of vehicles designed for mass-affluent investors. These structures balance reduced liquidity with the accessibility and scalability needed to draw in more capital.
Structuring for Both Accredited and Retail Investors
To fully capitalize on this opportunity, fund managers must thoughtfully structure offerings to serve both ends of the investor spectrum. Accredited investors may prefer structures that allow performance-based fees and less regulatory overhead, while retail investors must be served through 40 Act-compliant structures that emphasize transparency and investor protections.
Attracting both accredited and retail capital means creating distinct pathways—each aligned with the regulatory, liquidity and fee expectations of its target investor base.
Building a Scalable Retail Strategy
Engaging with retail investors requires a shift in approach. Traditional methods of face-to-face meetings and manual subscription documents are not scalable for such a vast pool of potential investors. Instead, successful firms are adopting comprehensive retail distribution strategies.
This includes wholesaling models, where internal and external sales teams work collaboratively to educate financial advisors, registered investment advisors (RIAs) and broker-dealer platforms on the benefits of semi-liquid alternative funds. The focus shifts from simply selling products to empowering advisors with the knowledge and tools they need to guide retail investors.
How ĚěĂŔ´«Ă˝ Can Help
At ĚěĂŔ´«Ă˝ Technologies, we specialize in providing the infrastructure and support needed to succeed in this rapidly evolving market. Through our Registered Fund Services and Transfer Agency capabilities, we enable fund sponsors to structure, launch and scale retail-focused investment vehicles, such as interval funds and tender offer funds.
Our solutions simplify both the advisor’s and the investor’s experience by offering:
These tools integrate directly into the platforms where investors and advisors already operate, eliminating administrative hurdles and delivering the institutional-grade experience retail investors expect.
The Path Forward
As private investments continue to evolve, the SEC has floated proposals to expand access further, rather than impose stricter limitations. This means the "Retail Revolution" is not just on the horizon—it’s already happening.
For firms to be ready to step into this opportunity, the key to success lies in preparation. Having the right product structures, educational frameworks and technological infrastructure will differentiate those who thrive from those left behind.
At ĚěĂŔ´«Ă˝ Technologies, we are here to help you chart this path forward. With solutions that bring credibility, scalability and seamless service to mass-affluent markets, we make it easier than ever to meet the demands of a growing retail audience while maintaining the highest operational standards.
The retail opportunity is vast. The time to act is now. Let's build the future of private market investing together. Contact us to get started.