SEC Moves to Open Private Markets to Retail Investors — SkimNews
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- SEC Chairman Paul Atkins announced new proposals to expand retail access to private market investments, saying they should "not be reserved for the wealthiest or for those deemed to be the most sophisticated."
- SEC proposals include letting registered investment advisers charge performance fees up to 20% on public funds and considering new ways for individual investors to qualify as accredited, including through an exam.
- ARK Venture Fund (ARKVX) held OpenAI and Anthropic among its top-10 holdings as of Aug. 31, while Robinhood Ventures Fund 1 (RVI) holds OpenAI alongside fintechs Ramp and Revolut.
- Private equity and VC fund expense ratios can run 3% to upper 4%, per Cordoba Advisory Partners' Rami Sarafa — well above typical index funds or public-stock ETFs.
- SEC rules cap net assets in illiquid investments at no more than 15% of a public fund, limiting private-company exposure even in crossover ETFs like KraneShares AGIX (1% expense ratio) and ERShares XOVR (0.75%).
- Financial advisors including Daniel Milan of Cornerstone Financial Services recommend retail investors keep alternative allocations at or below 10%, with private equity/VC potentially as low as 2-5%.
- About two dozen publicly available closed-end funds focus on private equity or venture capital, per Morningstar Direct, with availability depending on the investor's brokerage.
Why it matters: Retail investors eager for exposure to names like OpenAI and Anthropic before any IPO can already buy into funds like ARKVX, but they face 3-4% expense ratios, illiquid holdings with little public financials, and advisor-recommended caps of 10%. The SEC's new proposals — performance fees up to 20% and potential accredited-investor exams — could widen that access while raising the cost of entry.
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