Arabic version: المستثمرون الأفراد يتطلعون إلى صناديق الأسواق الخاصة قبل الطروحات العامة الكبرى

According to Cnbc, retail investors are increasingly seeking access to privately traded companies before potential public offerings by businesses such as Anthropic and OpenAI. Securities and Exchange Commission Chairman Paul Atkins said the agency is considering proposals intended to expand individual access to alternatives including private equity and hedge funds.

The proposals include allowing registered investment advisers to charge performance fees of up to 20% on public funds and considering new ways for individuals to qualify for private-market investments linked to accredited investors, including through an exam. Investors can already obtain limited private-market exposure through publicly available closed-end funds, venture-capital funds and some exchange-traded funds.

Those investments carry substantial risks. Private-company holdings are illiquid, investment timelines can be long, and there may be a gap between the value of underlying securities and the price investors pay for a fund. Information can also be limited because many portfolio companies are private, particularly early-stage businesses. Investors should review a fund’s holdings and redemption policies before buying.

Costs can be higher than for public-stock index funds or ETFs. Expense ratios for private-equity and venture-capital funds can range from 3% to the upper 4% range, while public-private ETFs may offer only minimal private-company exposure because of SEC limits on illiquid investments. Financial advisers cited in the report said allocation decisions should reflect risk tolerance, liquidity needs and time horizon, with retail investors generally advised not to put more than 10% of assets into alternatives.