Private investment markets
- Private investment funds (venture, private equity, private real estate funds, etc..) are run by fund managers (i.e., general partners) who generally raise capital through established investor relationships. Investors trust fund managers to manage the fund according to rules and structure of the fund and faithfully employ their investment strategy.
- Minimums to invest in private investment funds are high (usually $1M+) and given ten-year fund lives and the illiquid nature of private investments, investors cannot expect liquidity events (sales or IPOs) for years. Moreover, awareness of and access to private funds is difficult for all but the wealthiest of individuals or families. This makes investing in private funds challenging and out of reach for most investors. On the flip side, most fund managers do not want money from individual investors because each investor takes as much time to identify, market to, and manage as large institutions. For these reasons, despite being a top returning asset class, a very small percentage of accredited investors globally have commitments to private investments.
- Addressing these issues is an ambitious endeavor involving a combination of financial and technical innovation. As a technical component, a Smart Investment Fund on Findora will help restructure investment vehicles to distribute trust, increase transparency, and improve the management of information, including transactions and credentials. This is only one part of a larger solution. Ultimately, Findora will increase access and make investing in private investment funds as safe and as simple as investing in public markets.