"With every major private markets firm, and many smaller ones, racing to offer their products to wealthy retail investors, it's easy to forget that this was once anathema for the industry. Just ten years ago, most money invested in the private markets came from institutional investors, and the only way for regular people to get exposure was to be lucky enough to have a pension."
"Doug Ostrover, the co-CEO of Blue Owl and co-founder of GSO, now Blackstone Credit, is one of the private markets industry's private wealth pioneers. At an industry conference on Monday, he cautioned that gaining traction with this investor base can be costly - and slow. "We're spending tens of millions of dollars a year and not getting any traction," Ostrover recalled of the firm's efforts to sell to retail investors back in 2016."
"Meanwhile, companies continue to look to sell funds to wealthy investors, a sales strategy that requires access to financial advisors. The largest players in the industry have invested millions of dollars into reaching these potential clients: whether through technology investments and education for financial advisors, like Apollo, or by hiring wealth management veterans to head up businesses, like Ares's Raj Dhanda, a 26-year Morgan Stanley vet."
Private wealth has become a major focus for private markets firms seeking to expand beyond institutional capital. Ten years ago, private markets were dominated by institutional investors and pensions provided the primary retail access. Blue Owl experienced a slow, costly push into wealthy retail clients, spending tens of millions annually without immediate traction. The industry is now targeting 401(k) investors following an executive order that could open retirement accounts to private equity. Firms are investing millions in technology, advisor education, and hiring wealth-management executives to sell funds through financial advisors, accepting a long, expensive sales cycle to gain retail traction.
Read at Business Insider
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