A $150 trillion opportunity:
Bain & Company’s recently published Global Private Equity Report highlighted the growth opportunity for the private markets outside the institutional space with the headline statistics that individual investors hold roughly 50% of all global wealth but account for only 16% of private capital AUM.
Yet from an onboarding perspective, how accessible are the private markets for individual investors? Is it an experience they’ll wish to repeat, or recommend to peers? And how feasible is it for fund managers to onboard much higher numbers of smaller investors efficiently and cost effectively?
The problem to solve
To access the private markets investors must first demonstrate they have sufficient funds and financial know-how, that their source of funds is legitimate and that they’re prepared to pay their taxes. Typically, the onboarding process entails:
- Sending copies of sensitive personal documents – passports, bank statements, and so on – via email,
- Wading through complex subscription documents (which even experienced investors often struggle with), and
- Having to provide the same information in a variety of formats.
The inability to reuse this information for future investments compounds the frustration for investors. Moreover, it presents a problem of scalability for fund managers, making this legacy approach a poor fit with the ongoing trend towards the democratisation of the private markets and the pursuit of retail capital.
As a result, there’s a growing recognition that the onboarding process needs to evolve if the private markets are to become more widely accessible.
Onboarding goals
Amongst the enquiries we’re receiving from fund managers, their objectives broadly coalesce around driving efficiency and delivering a better investor experience through:
- Reducing touchpoints to investors for information,
- Providing investors with one platform within which they can complete the entire onboarding process and manage their own information going forward, and
- Offering white glove investor support.
Our solution
At IDR we’re empowering investors through enabling them to authenticate once, across every aspect of the onboarding process, with live assistance from an expert team. Equipping investors with the tools to manage their own data and to share their verified credentials securely across their portfolios helps to establish a much more inclusive and accessible private markets eco-system. For smaller, non-institutional investors there’s no need for a big team or an army of lawyers to handle all the paperwork if the digital documents they need to complete are tailored to their circumstances and expert legal and compliance support is on hand as required. Reinvesting with an approved investment profile is even easier still.
Fund managers also benefit as they’re freed from the burden of gathering and verifying investor data. Raising bigger funds across a wider pool of investors is faster and more cost effective if investors are pre-approved, whilst ensuring compliance with AML obligations is simpler when centralised investor data provides a golden source of truth.
Join us
Our trusted hub is already connecting over 40,000 investors across 5,600 funds and 300 managers around the globe. Why not join them?
